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RCM on purchase of advertisement space outside India

Jeetu Kodwani (Consultant) (412 Points)

21 February 2020

dear experts,

we have purchased advertisement space on blogger and other websites from other countries,
how this transaction will b treated in GST,
is we have to pay RCM on that??

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9 Replies

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 21 February 2020

As per my view.,

Yes... Rcm applicable for import of service. The advertisement space is a supply of service...

Jeetu Kodwani (Consultant) (412 Points)
Replied 21 February 2020

Sir,
advertisement space is provided outside India so the
place of supply of service will b outside India, then how can the rcm is applicable??

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 21 February 2020

Are You supply that service or receive...?

Jeetu Kodwani (Consultant) (412 Points)
Replied 21 February 2020

I received the service from Iran and supply to UK.

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 21 February 2020

In term of Section 2(11) of IGST Act import of Services fulfills when Location of Receptient is in India, Supplier is out of India & Services being provided in India.

Hence as per your the services being received in India , hence cover under Import Services , So deposit IGST under RCM

Jeetu Kodwani (Consultant) (412 Points)
Replied 21 February 2020

Thanks sir
but the service are provided by the supplier at Iran and in the Iran country itself.
the advertisement is viewed at the website in Iran

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 22 February 2020

But you clarify above that you in India received services from Iran ????
Dear kindly clarify procedure that how you book advertisement space therein , whether it's on internet ,& the computer system used for the same is in India ????

Jeetu Kodwani (Consultant) (412 Points)
Replied 22 February 2020

Sorry sir,
will clarify the case,

Mr.A (India) buys the space for online advertisement from Mr.B (Iran) and sell it to Mr.C (UK)

the advertisement will be displayed at various social networking websites of Iran.

in short Mr.C (UK) want to advertise his products at Iranian website in Iran.

for Mr.A (India) sales side is export of service which is exempt,
the query is regarding purchase side??

thanks

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 23 February 2020

Yes it's import of Services.

As per Section 13(12) IGST Act , it's deemeding provision that Receptient is in Taxable Territory (India) if Any two of following conditions are satisfied:

1. Location of Receptient of services through internet is India

2. Settlement of payment through credit card,debit card or charge card or smart card or any card which is being issued in India.

3. Billing address is Recepeint of services in India

4.Internet protocol address of device used by Receptient of services is in India

5 The bank of Receptient used therein is located in India.

6. The country code of subscriber identify module card used by the Recipient of services is India

HENCE I ASSUME THAT above any 2 condition is satisfied in your case & the same is cover under Import of Services.