RCM OF EXHIBITION CHARGES PAID OUTSIDE INDIA

[NILESH PITALE]

DEAR EXPERTS

MY CLIENT HAS PAID EXHIBITION STALL CHARGES IN THE OUTSIDE INDIA(USA). HE HAS CLAIMED THE SAME EXPENSESS IN HIS PROFIT & LOSS ACCOUNT.

QUESTION : IS IT RCM APPLICABLE ON STALL CHARGES PAID IN THE OUTSIDE INDIA(USA).

PLEASE GUIDE

[Sadanand Bulbule]

Is there import of any service liable to pay tax under RCM?

[Brijesh Verma]

Supplier is outside the taxable limits of India and the place of supply is also out (since event is outside India). No RCM applicable. 

[KASTURI SETHI]

Admission to exhibition and organization of exhibition both activities were performed in a non-taxable territory. Place of supply is covered under Section 13 (5) of IGST. RCM is not applicable.

[Raam Srinivasan Swaminathan Kalpathi]

Exhibition conducted outside India - POS is outside India and covered by Sec.13(5) of the IGST Act. RCM is definitely not applicable.  Nevertheless, a recent Rajasthan HC decision Re: Savio Jewellery - 2024 (5) TMI 658 - RAJASTHAN HIGH COURT has led to a lot of consternation and uncertainty.  Would advise the querist to keep tab of his ruling also.

[KASTURI SETHI]

If it is so, it is a conflict between Act and Notification (RCM). In such a conflicting situation, Act will override notification.

"Rules and Notification cannot override the Act and cannot be derogatory to the object of the Act" ----Supreme Court in the case of UOI Vs. Jalyan Udyog - 1993 (9) TMI 108 - SUPREME COURT.

 

[Shilpi Jain]

Once place of supply outside India, tax should not apply. 

Advance rulings find innovative way of taxing each and every situation!

[KASTURI SETHI]

-----------------------In order to fetch more revenue for Govt. by way of interpreting GST laws in a different way.

AI Summary

Place of supply outside India bars reverse charge mechanism; no RCM on overseas exhibition stall charges under IGST. Where the place of supply for exhibition admission and organisation is outside India, the import of service concept is not triggered and IGST does not apply; consequently the reverse charge mechanism is not attracted and no Indian tax liability arises on overseas exhibition stall charges, subject to emerging rulings that may create legal uncertainty.