gst on sponsorship and brand promotion

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vishal verma (Querist)
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18 August 2017 pl provide sac code and rate of gst applicable for in case of receiver a proprietor firm or any reverse charge plz resolve

vishal verma

vishal verma (Querist)
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18 August 2017 plz reply expert s

Aashok Kumar Sharma online

Aashok Kumar Sharma

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27 July 2024 ### GST on Sponsorship and Brand Promotion

**1. **GST Rates and SAC Codes:**

**A. **Sponsorship Services:**

- **SAC Code:** 9983
- **GST Rate:** **18%**. Sponsorship services are classified under the general category of business support services, which are typically taxed at 18% GST.

**B. **Brand Promotion Services:**

- **SAC Code:** 9983
- **GST Rate:** **18%**. Brand promotion services are also generally categorized under business support services and taxed at 18% GST.

**2. **Reverse Charge Mechanism (RCM):**

**A. **Applicability of RCM:**

- **Sponsorship Services:** Under GST, sponsorship services are generally not subject to Reverse Charge Mechanism (RCM). The standard rate of 18% GST applies, and it is the responsibility of the service provider to charge and pay GST.

- **Brand Promotion Services:** Similarly, brand promotion services are usually subject to a standard rate of 18% GST, and are not typically covered under RCM.

**B. **Exceptions:**

- **Specific RCM Scenarios:** RCM could apply in specific cases if the service provider is from a non-resident entity, or if the service is provided by a registered person to a registered person in certain specific cases. However, in the normal course of business, both sponsorship and brand promotion services are not subject to RCM.

### **3. **Invoicing and Reporting:**

**A. **For Service Providers:**

- **Invoicing:** Issue an invoice with 18% GST, mentioning the SAC Code 9983.
- **Reporting:** Report the income and GST in your GST returns (GSTR-1) and pay the GST through GSTR-3B.

**B. **For Service Receivers (Proprietor Firm):**

- **Receiving Services:** You will receive the invoice with 18% GST if you are receiving sponsorship or brand promotion services.
- **Claiming ITC:** You can claim Input Tax Credit (ITC) on the GST paid, provided the services are used for business purposes.
- **Reverse Charge:** Generally, you will not need to apply RCM unless specifically stated under the law or in case of services from non-resident entities.

### **4. **Summary:**

1. **GST Rate on Sponsorship Services:** **18%** with SAC Code **9983**.
2. **GST Rate on Brand Promotion Services:** **18%** with SAC Code **9983**.
3. **RCM:** Generally not applicable for these services. Standard GST rates apply.
4. **ITC:** Available for the GST paid on these services if used for business purposes.

### **References:**

- **GST Rate Notifications:** Notifications detailing GST rates for various services, including business support services.
- **HSN/SAC Codes:** Standard classification codes used for GST purposes.

For any specific scenarios or further details, consulting with a GST professional or tax advisor is recommended.

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