Dealer Meet / Nukkad Meet

[SHYAM PATHAK]

Dear Sir,

May we hire an Event management GST registered organization to organize Dealer Meets and Nukkad meeting to be held and debit that amount in PL and claim ITC on such promtional expences.

[KASTURI SETHI]

SH.SHYAM PATHAK JI,

In my view, YES but subject to the fulfillment of conditions laid down in Sections 16 & 17(5) of CGST Act.You should also go through the definition of 'Event Management Service' pertaining to pre-GST era.

Section 65(105)(zu) of Finance Act, 1994, is, unlike other taxable services that are ‘provided to any person’ ‘by any other person’, rendered

‘(zu) to any person, by an event manager in relation to event management’ with the relevant expressions,

‘(40) “Event Management” means any service provided in relation to planning, promotion, organising or presentation of any arts, entertainment, business, sports, marriage or any other event and includes any consultation provided in this regard’

and

‘(41) “Event Manager” means any person who is engaged in providing any service in relation to event management in any manner’

defined in Section 65 of Finance Act, 1994.

AAR Rajasthan has decided the issue which is as under:-

2019 (7) TMI 847 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN IN RE : ALL RAJASTHAN CORRUGATED BOARD AND BOX MANUFACTURERS ASSOCIATION

The above material can help you to arrive correct and concrete decision.

[DR.MARIAPPAN GOVINDARAJAN]

A lengthy reply by Shri Sethi.

[Shilpi Jain]

Ensure that the event company bills you one complete invoice without break up there in. Else the department may dispute credit on the food and beverages component if any mentioned in the invoice.

This is a good way to avail credit of food, outdoor catering services, which is otherwise blocked under gst.

[SHYAM PATHAK]

Thank you, Sh. Sethi Sir and Shilpi Mam for your prompt and valuable reply but I need your further attention:

1. What should be description on bill in case of Nukkad Meets ?

2. Is there any TDS applicability on payment of such type of sales promotion events ?

3. What SAC/HAC should be mentioned on Bill ?

4. is there any agreement /legal formalities before conducting such events ?

[KASTURI SETHI]

SAC 998 596. Go through code and select the language mentioned therein. Available on CBIC website.

[DR.MARIAPPAN GOVINDARAJAN]

What is the meaning of 'nukkad meet'?

[KASTURI SETHI]

Answer to Q.No.4 is yes.

GST TDS provisions apply where total value of such supply, under a contract exceeds ₹ 2.50 lakhs (excluding GST). Section 51 (1) of CGST Act refers. More exemptions are available, so refer to para no.4 of SOP issued by CBIC on 20.9.18.

[KASTURI SETHI]

Sir,

Nukkad is a Hindi word which means 'corner'.

[KASTURI SETHI]

Q. . Is there any TDS applicability on payment of such type of sales promotion events ?

A. Para No.4 of SOP.

"When tax deduction is not required to be made under GST ?:

Tax deduction is not required in following situations:

a) Total value of taxable supply ≤ ₹ 2.5 Lakh under a contract.

b) Contract value > ₹ 2.5 Lakh for both taxable supply and exempted supply, but the value of taxable supply under the said contract ≤ ₹ 2.5 Lakh.

c) Receipt of services which are exempted. For example services 10 exempted under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time.

d) Receipt of goods which are exempted. For example goods exempted under notification No. 2/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time.

e) Goods on which GST is not leviable. For example petrol, diesel, petroleum crude, natural gas, aviation turbine fuel (ATF) and alcohol for human consumption.

f) Where a supplier had issued an invoice for any sale of goods in respect of which tax was required to be deducted at source under the VAT Law before 01.07.2017, but where payment for such sale is made on or after 01.07.2017 [Section 142(13) refers].

g) Where the location of the supplier and place of supply is in a State(s)/UT(s) which is different from the State / UT where the deductor is registered.

h) All activities or transactions specified in Schedule III of the CGST/SGST Acts 2017, irrespective of the value.

i) Where the payment relates to a tax invoice that has been issued before 01.10.2018.

j) Where any amount was paid in advance prior to 01.10.2018 and the tax invoice has been issued on or after 01.10.18, to the extent of advance payment made before 01.10.2018.

k) Where the tax is to be paid on reverse charge by the recipient i.e. the deductee.

l) Where the payment is made to an unregistered supplier.

m) Where the payment relates to “Cess” component.

[Ganeshan Kalyani]

Yes, you can hire event management company, receive GST invoice, debit cost to P&L and debit GST on invoice to current asset and claim ITC against taxable outward supply.

AI Summary

Input tax credit on event management services depends on compliant invoicing and TDS exceptions affecting promotional events. Eligibility to claim input tax credit on event management services for dealer and nukkad meets hinges on satisfying Sections 16 and 17(5) requirements; event management is a defined taxable service and is generally creditable from a registered supplier. Credit on composite invoices that include food or catering may be challenged unless billed as a single undissected supply with appropriate SAC; TDS under GST applies where contract value exceeds the statutory threshold subject to SOP exceptions such as low-value taxable supply, exempt supplies, reverse charge, unregistered suppliers and specified Schedule III transactions. A written agreement, correct SAC and compliant invoicing are recommended.