RCM sponsorship

[Madhavan iyengar]

Dear Experts

Where a Company receives sponsorship Income from a Individual who is not Registered will the same be chargeable to tax under forward charge by the Company since RCM provisions of sponsorship apply only to a body corporate and Partnership firm and not to a Individual Experts pls clarify or can it be treated as exempt as RCM does not apply

AI Summary

Company Must Pay 18% GST on Sponsorship Income from Individual Under Forward Charge Mechanism, Not RCM A company receiving sponsorship income from an unregistered individual questioned whether this income is taxable under the forward charge mechanism, as the reverse charge mechanism (RCM) typically applies to sponsorship services provided to a body corporate or partnership firm. Experts clarified that since the company is the supplier and the individual is the recipient, RCM is not applicable. Instead, the company must pay GST under the forward charge mechanism (FCM) at 18%, as the transaction does not fall under any specific exemption. The consensus among experts is that the sponsorship service is taxable under FCM.