Import of service- IP Rights

[Ramakrishna Malapaka]

Learned experts,

May kindly share your views on the below context…
Context: IP Rights are allotted to an Indian entity by a foreign entity for promoting/ conducting a sporting event in India. Payment to the same has been released by a foreign entity (who is a RP of Indian entity) to the foreign service provider from outside India. Event would take place in India after making arrangements by Indian entity and giving access to the foreign entity for performing the event. Foreign entity does not have fixed / permanent establishment in india. withholding tax at applicable rates shall be done by Indian entity.

Q: 1. Please let’s know…once the event is performed, Whetter GST is applicable or not?

Q: 2. If applicable, Forward charge or RCM? Based on below payment method, I.e., Payment against the event is made partially from Indian entity and balance from RP entity outside India.

Regards

[Pradeep Reddy Unnathi Partners]

can you slightly elaborate the query please

[KASTURI SETHI]

In my view, tax is applicable under RCM in this scenario.

[Shilpi Jain]

Event is in India. Place of supply thereby in INdia. Liable as import of service.

[Ramakrishna Malapaka]

In light of SC decision in 2017 in the case of Formulae 1 car race matter though they did not have the Fixed Establishment in India .. even for a day of conducting any event by the nonresident service provider on Indian land treated as establishment of PE and made liable for taxability in IT laws… if the same analogy is applied for indirect tax in current situation, consideration received by the service provider for rendering a sporting event in taxable territory..does gst liability not fall under forward charge in the hands of foreign service provider ..? May plz comment ..

AI Summary

Indian Entity Must Withhold Tax on IP Rights for Sporting Event; GST Under Reverse Charge Mechanism Discussed An Indian entity has been granted IP rights by a foreign entity to conduct a sporting event in India. The foreign entity, which does not have a permanent establishment in India, has made payments to a foreign service provider. The Indian entity is responsible for withholding tax. The queries raised include whether GST is applicable once the event is performed and if so, whether it should be under forward charge or reverse charge mechanism (RCM), given that payments are made partially by the Indian entity and partially by a related party outside India. Respondents suggest GST is applicable as an import of service under RCM. There is also a reference to a Supreme Court decision regarding tax liability for non-resident service providers.