Sponsorship service

[Guest]

Dear Sir, Pls explain point of taxation in case of sponsorship services for both service receiver and service provider in simple words, thanks and regards

[Rajagopalan Ranganathan]

Dear Mr. Shinde,

100% of service tax in respect of sponsorship services is to be paid by the receiver of the service vide sl. No. 3 of Notification No.30/2012-ST dated 20.6.2012 and rule 2 (d) (C) of Service Tax Rules. (as inserted with effect from 1.7.2012.). In other cases, service provider is liable to pay the service tax.

In case of services covered under reverse charge, the point of taxation shall be the date on which payment is made to service provider, if the payment for such service is made within three months from the date of invoice.

If payment for such service is not made within three months from the date of invoice, the point of taxation will be date immediately following the period of three months. This provision is with effect from 1.10.2014.

For the period prior to 1.10.2014 the payment for such service is to be made within six months from the date of invoice.

AI Summary

Clarification on Taxation for Sponsorship Services: Service Receiver Pays 100% Service Tax; Key Dates for Reverse Charge Services. A query was raised regarding the point of taxation for sponsorship services, specifically for both service receivers and providers. The response clarified that, according to Notification No.30/2012-ST and Service Tax Rules, the service receiver is responsible for paying 100% of the service tax on sponsorship services. For reverse charge services, the point of taxation is the payment date if made within three months of the invoice date. If not paid within three months, the point of taxation is the date immediately after this period. Prior to October 1, 2014, the payment period was six months.