Place of Supply in case of Sponsorship Services

[Vinay Kumar]

What would be the place of supply in case of sponsorship services? Whether it will fall under the section 12(7) or 12(2) of IGST Act?

[PAWAN KUMAR]

Dear Sir,

As per Section 12 (7) , in case of supply of service in relation to assigning of sponsorship with reference to events/organizing events, supply to registered person, place of supply shall be location of such registered person. In case of supply to other person other than registered person, the place where the event is actually held.

[Vinay Kumar]

Dear sir,

First of all, thank you for the reply. I too had the same view before. But after that, I am of the opinion that "sponsorship" is different and "assigning of sponsorship" is different. "Assigning of sponsorship" generally means there will be a sponsorship broker who will act as an agent between event organizer and sponsor. His responsibility is to get sponsorships for the event. And he will charge commission for such activity. This kind of service is covered under section 12(7). So, the place of supply of sponsorship is still in question.

[PAWAN KUMAR]

Dear Sir,

as per my view, assigning of sponsorship to any event fall under 12(7) and it does not cover any agent/principal. place of supply in case of any event/sponsor the event will be the place where the event is actually held.

as per section 12 (2) IGST act, if any service is supplied to registered person, then place of supply will be location of such registered person. similarly 12(7) is also specified.

i hope it is now clear.

[YAGAY and SUN]

Generally, the place of supply of services is the location of the service recipient.nIn cases where the services are provided to an unregistered dealer and their location is not available the location of service provider will be the place of provision of service.

[YAGAY and SUN]

Section 12(2)

This section covers general services that are separate from the services described in the following subsections. Therefore, the place of supply shall be the location of a person to whom the services are provided.

However, there are times when services are supplied to any person other than a registered person. The place of supply in such cases shall be:

the location of the recipient where the address on record exists and

location of the supplier of services in other cases.

[YAGAY and SUN]

Section 12(7)

This section provides the principles regarding the place of supply of the following services:

Organisation of a cultural, artistic, sporting, scientific, educational or entertainment event. This also includes supply of services in relation to a conference, fair, exhibition, celebration or similar events.

Services ancillary to organisation of any of the events or services referred to in the above clause. This also includes assigning sponsorship to a registered person or a person other than a registered person for such events.

So, the place of supply of services for the above cases shall be as per the following rules.

the place of supply shall be the location of the person if such services are supplied to a registered person.

But the place of supply shall be the place where the event is actually held if the above services are supplied to a person other than a registered person. However, the place of supply shall be the location of the recipient in case the event is held outside India.

Furthermore, there are times when the event is held in more than one State or Union territory. And a consolidated amount is charged for the supply of services relating to such an event. So, the place of supply in such a situation shall be each of the respective States or Union territories where event is held.

Furthermore, the value of services in such a case shall be taken proportionately as per the contract. However, the value for supply of such a service is considered as per the rules set in case such a contract does not exist.

Example

Shekhar is based in Ahmedabad. He solicits the services of an event management company based in New Delhi for his daughter’s marriage. Also, he plans for a destination wedding at a palace in Udaipur.

So, the place of supply is Ahmedabad (Gujarat) and hence IGST is charged in this case. But the place of supply would be Udaipur (Rajasthan) if Shekhar is unregistered. Again IGST would be charged.

AI Summary

Place of supply: sponsorship services follow recipient location if registered, otherwise the event location determines tax jurisdiction.
Place of supply for sponsorship and event-related services depends on recipient registration and event location: if supplied to a registered person, the place of supply is the recipient's location; if supplied to a non-registered person, the place of supply is where the event is held. For events across multiple States/UTs, each location where the event occurs is treated as a place of supply and the service value must be apportioned among those locations as per contract or applicable rules.