2022 (5) TMI 962 - AAR - GST

Medical conference services classified as professional training composite supply under GST with ITC allowed on supporting services

In Re: M/s. Indian Society of Critical Care Medicine,

The AAR Gujarat ruled on GST classification for medical conference services. ISCCM's supply to delegates constituted a composite supply with professional ... Nature and classification of service - imparting educational training by developing and running Post - graduate fellowship courses & diplomas in the field of critical care medicine and providing basic training in intensive care for non-specialists - Service provided by ISCCM to the delegates - Service provided by ISCCM to the exhibitors - nature of service and classification in accordance with Notification No. 11/2017-CT(R), dated 28.06.17 in respect of brand promotion packages - liability of service tax under Reverse Charge Mechanism - admissibility of Input Tax Credit - Services provided by the hotel including accommodation, food & beverages - Supply of food and beverages by outside caterers - Services provided by event manager like pickup & drop, exhibition stall set-up, tenting, etc. ISCCM supply to delegates - principal supply or composite supply - HELD THAT:- ISCCM supplies a composite package to its delegates, at an all inclusive registration fees, comprising of the following services: Technical Seminars, Access to exhibition, Hotel Room Accommodation, Cultural program, lunch & dinner, Airport Pick Up & Drop - the principal supply of ISCCM to its delegates attending the conference is imparting knowledge/ workshops on topics of medical field. For this very reason the delegates desire to attend the conference and not merely for supporting services such as hotel accommodation or air port pick up and drop - Professional Service supply is the essence of the package of services supplied by ISCCM to its delegates and is thereby the principal supply by ISCCM to its delegates. ISCCM supply to Exhibitors - HELD THAT:- ISCCM is organizing trade fair and exhibition. Its exhibitors showcase and exhibit their products/ services. The participation fees charged by ISCCM on these exhibitors is for the service of organizing exhibition for the exhibitors which finds entry at SAC 998596 under ‘events, exhibitions, conventions and trade shows organisation and assistance services’. Tax Liability for showcasing name/logo/brand of other persons by ISCCM - HELD THAT:- ISCCM supplies Sponsorship services to its respective customers which finds entry at SAC 998397 under the category of ‘Sponsorship services and brand promotion services’. We note that with regard to sponsorship service GST liability is on Reverse Charge Mechanism on the service recipient when the recipient is located in the taxable territory, vide Notification 13/2017- CT(R) dated 28-6-17. It is found that the supply in this regard to be Sponsorship service supply and dismiss ISCCM’s submission that this supply is brand promotion supply. Admissibility of ITC by ISCCM - HELD THAT:- Hotel’s principal supply to ISCCM is Convention Service. ISCCM’s submission that hotel’s principal supply is accommodation service supply, is dismissed.Either the hotel raises an itemised bill or a single price bill, ITC is admissible on all items such as convention, accommodation, food & beverages - ITC of tax paid on food and beverages will be available to ISCCM because as ISCCM receives this service from Hotel/ Caterer, it uses this service for making an outward taxable supply as an element of taxable composite supply to its delegates. Rent-a-cab service ITC to ISCCM - HELD THAT:- The Cabs have approved seating capacity of not more than 13 persons (including the driver). This service is supplied to ISCCM and ISCCM further supplies it as a part of composite supply to the delegates and thereby the proviso to Section 17(5)(b)(i) CGST Act is satisfied for admissibility of this ITC - In terms of Section 16(1) CGST Act, Exhibition stall set-up and tenting is an input service to ISCCM used in its business, thereby its ITC is admissible. Issues Involved:1. Nature of service and classification for services provided by ISCCM to delegates and exhibitors.2. Nature of service and classification for brand promotion packages offered by ISCCM.3. GST liability on sponsorship services.4. Admissibility of Input Tax Credit (ITC) for ISCCM on various services.Issue-wise Detailed Analysis:1. Nature of Service and Classification:- Service to Delegates: ISCCM provides a composite package to delegates, including technical seminars, exhibition access, accommodation, cultural programs, meals, and airport transfers. The principal supply is identified as professional service supply, classified under SAC 998399.- Service to Exhibitors: ISCCM organizes trade fairs and exhibitions where exhibitors showcase their products/services. The participation fees are for organizing the exhibition, classified under SAC 998596 as 'events, exhibitions, conventions and trade shows organization and assistance services.'2. Brand Promotion Packages:- Nature and Classification: ISCCM offers brand promotion packages including branding on various materials and presentations. These services are classified under SAC 998397 as 'Sponsorship services and brand promotion services.'- GST Liability: The GST liability for sponsorship services falls on the service recipient if the recipient is a body corporate or partnership firm located in the taxable territory, under the reverse charge mechanism as per Notification 13/2017-CT(R) dated 28-6-17. If the recipient is not a body corporate/firm, ISCCM must pay GST on a forward charge basis.3. Admissibility of Input Tax Credit (ITC):- Hotel Services: ITC is admissible on services provided by the hotel, including accommodation, food, and beverages, as these are used in the course of business and are part of a taxable composite supply.- Food and Beverages by Outside Caterers: ITC on these services is admissible under Section 17(5)(b)(i) of the CGST Act, as they are used for making an outward taxable supply.- Event Manager Services: ITC on services like pickup & drop, exhibition stall setup, and tenting is admissible as these are input services used in ISCCM's business.Findings:- ISCCM’s Supply to Delegates: The principal supply is professional service supply (SAC 998399).- ISCCM’s Supply to Exhibitors: Classified under SAC 998596.- Brand Promotion Packages: Classified under SAC 998397.- GST Liability on Sponsorship Services: Falls on the recipient under reverse charge if the recipient is a body corporate or partnership firm; otherwise, ISCCM pays GST on forward charge.- ITC Admissibility: ITC is admissible on hotel services, food and beverages by outside caterers, and event manager services.Ruling:1. ISCCM supplies a composite service to delegates with professional service as the principal supply (SAC 998399).2. ISCCM provides 'Exhibition, Trade show organization, and assistance services' to exhibitors (SAC 998596).3. ISCCM supplies sponsorship services (SAC 998397).4. GST liability on sponsorship services is on the recipient if they are a body corporate or partnership firm; otherwise, ISCCM is liable.5. ITC is admissible for ISCCM on the specified services.