GST on exhibition expenses

[Kaustubh Karandikar]

XYZ, the subsidiary outside India had made some expenses towards exhibition held outside India and amount of the same was recovered from PQR which is the principal in India. Whether PQR is required to pay GST under reverse charge?

[Amit Agrawal]

As per Section 13 (5) of the IGST Act, 2017, The place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held.

Once the place of supply of services is outside India, there cannot be import of services u/s 2 (11) of the IGST Act, 2017.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

Dear Sir,

No import of service, especially, keeping in view of place of supply outside India. To qualify for import of service all the three conditions laid down in Section 2(11) of IGST Act should be fulfilled. Condition No.(iii) is not fulfilled. Hence no import of service. No RCM is applicable.

Also read detailed replies against Issue ID 118666.

[Ganeshan Kalyani]

Same applicability was there in service tax as well.

[Ganeshan Kalyani]

I agree with the view of experts.

[Padmanathan KV]

I agree with experts on PoS.

Kaustubh Ji, can you elaborate the facts a little more? Whether expenses were incurred on behalf of PQR or for XYZ itself? if it is only a mere reimbursement of expense, then whether it would be a supply itself has to be examined.

[Ganeshan Kalyani]

Subject to fulfillment of the conditions of pure agent the applicability of GST can be checked. The first transaction - no doubt, the subsidiary situated abroad has incurred the expense. This transaction is not connected to PQR situated in India. So no GST. The only thing is that the subsidiary is recovering that cost from PQR. This can be analysed based on pure agent conditions or a related party transaction where there is deemed supply of service and GST is applicable under RCM.

AI Summary

Place of supply outside India prevents import of services and generally avoids reverse charge, but reimbursements may trigger RCM.
Services for organisation or admission to an exhibition are supplied where the event is held; if the event is outside India the supply's place is outside India and does not qualify as an import of service, so reverse charge is generally not attracted. However, recoveries from an Indian principal require factual analysis: if treated as a pure agent reimbursement there is no supply, but if the recovery is a deemed supply or a related-party transaction that fails pure agent conditions, GST may apply under reverse charge.