GST Ruling: Composite Supplies Taxable at 18%, Input Tax Credit Allowed

The ruling confirmed that the services provided by the applicant to delegates and exhibitors constitute composite supplies classifiable under Service Code 998596, taxable at 18% GST. Brand promotion packages are also classified under Service Code 998397, taxable at the same rate. The applicant is required to pay GST on brand promotion services under the normal charge mechanism. Input Tax Credit is allowed for services procured from hotels, outside caterers for food and beverages, and rent-a-cab services used for event organization and brand promotion.

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Issues Involved:
1. Nature and classification of services provided by the applicant to delegates and exhibitors.
2. Nature and classification of brand promotion packages.
3. Applicability of reverse charge mechanism for brand promotion services.
4. Admissibility of Input Tax Credit (ITC) for various services procured by the applicant.

Issue-wise Detailed Analysis:

1. Nature and Classification of Services Provided by the Applicant to Delegates and Exhibitors:

The applicant, an association engaged in the upliftment and technological advancement of the Corrugation Industry, is organizing a conference and exhibition. The services provided to delegates include technical seminars, exhibition access, hotel accommodation, cultural programs, meals, and airport transfers, all bundled under an all-inclusive registration fee. The applicant contends that these services constitute a "composite supply" under the GST Act, 2017, as they are naturally bundled and provided in conjunction with each other, with the principal supply being the organization of the conference.

The ruling confirms this interpretation, stating that the supply made by the applicant to the delegates is indeed a composite supply, with the principal supply being the organization of the conference. The classification of such services falls under Service Code 998596, described as "Events, exhibitions, conventions and trade shows organizations and assistance services," taxable at 18% GST (SGST 9% + CGST 9%).

Similarly, the services provided to exhibitors, which include participation in the trade fair, are also classified under Service Code 998596 and are taxable at the same rate.

2. Nature and Classification of Brand Promotion Packages:

The applicant offers brand promotion packages to interested vendors, which include branding on various event-related items and media. The term "brand promotion" is not explicitly defined under the GST Act, 2017, but reference is made to the Service Tax regime where brand promotion was a declared service.

The ruling classifies brand promotion packages under Service Code 998397, described as "Sponsorship services and brand promotion services," taxable at 18% GST (SGST 9% + CGST 9%).

3. Applicability of Reverse Charge Mechanism for Brand Promotion Services:

The ruling clarifies that brand promotion services provided by the applicant to partnership firms and body corporate do not fall under the category of sponsorship services liable to tax on a reverse charge basis under Section 9(3) of the CGST Act, 2017. Therefore, the applicant is liable to pay GST on such services under the normal charge mechanism.

4. Admissibility of Input Tax Credit (ITC) for Various Services Procured by the Applicant:

The applicant will procure various supplies during the event, including services by hotels (accommodation, conference venue, food & beverages), outside caterers, and event managers (pickup & drop, exhibition setup, etc.).

- Hotel Services: The ruling states that the composite supply by the hotel, where accommodation is the principal supply, qualifies for ITC as it is used in the course of business and is eligible under Section 16 of the GST Act, 2017.
- Food and Beverages by Outside Caterers: ITC is admissible for food and beverages supplied by outside caterers as these are used as an element of the outward supply of event organization, which is a taxable composite supply.
- Rent-a-Cab Services: ITC is also admissible for rent-a-cab services used for event organization and brand promotion, as these are taxable composite supplies.

Ruling:

1. The service provided by the applicant to the delegates and exhibitors is a composite supply, classifiable under Service Code 998596, taxable at 18% GST.
2. The service of brand promotion packages is a composite supply, classifiable under Service Code 998397, taxable at 18% GST. The applicant is liable to pay GST on such services under the normal charge mechanism.
3. ITC is admissible for services provided by hotels, food and beverages supplied by outside caterers, and services provided by event managers.

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