TaxTMI 
TaxTMI 
TaxTMI 
Clarification in respect of advertising services provided to foreign clients
X X X X Extracts X X X X
X X X X Extracts X X X X
....le, mutatis mutandis, in implementation of the DGST Act, 2017. Copy of the referred CBIC circular is attached herewith. This Circular is clarificatory in nature. Difficulty if any, in the implementation of this Circular may be brought to the notice of the office of the Commissioner of State Tax, Delhi. (CHANCHAL YADAV) COMMISSIONER (STATE TAX) Circular No. 230/24/2024-GST F. No. CBIC-20001/6/2024-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing *** New Delhi, dated the 10th September, 2024 To, The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/ Commissioners of Central Tax (All), The Principal Directors General/ ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he same. In such a case, the advertising agency provides a one stop solution to the client who outsources the entire activity to the agency. 2.2 In this scenario, media owners raise invoice to the advertising agency for inventory costs, which are then paid by the advertising agency. Subsequently, the advertising agency raises invoice to the foreign client for the rendered advertising services and receives the payments in foreign exchange from the foreign client. In this regard, clarification has been sought as to: a. Whether the advertising company can be considered as an "intermediary" between the foreign client and the media owners in terms of section 2(13) of Integrated Goods and Services Tax Act, 2017 (herein afte....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the said media plan and procurement of media space for airing or releasing or printing advertisement. 3.1.3 The advertising agency, in this case, enters into two agreements: i. With the client located outside India for providing a one stop solution starting from designing the advertisement to its display in the media as agreed to with the client. The advertising company raises invoice to its foreign client for the above advertising services and the payments of the same is received from the foreign client in foreign exchange. ii. With the media company to procure media space for display of the advertisement and to monitor campaign progress based on data shared by the media company. The media company bills the advertising agency and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to pay consideration where a consideration is payable for the supply of goods or services or both. 3.2.2 In the instant scenario, the foreign client is liable to pay the consideration to advertising company for the supply of advertising and not the consumers or the target audience that watches the advertisement in India. Further, in this case, even if a representative of the said foreign client based in India, including a subsidiary or related person of the said foreign client, is interacting with the advertising company on behalf of the said foreign client, the said representative based in India cannot be considered as a recipient of the service, if the agreement is between the foreign client and the advertising company, the invoice....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to be physically available with supplier of advertising services. Therefore, the said provisions of clause (a) of the said sub-section cannot be made applicable for determination of place of supply of advertising services. 3.3.2 Further, clause of (b) of sub-section (3) of section 13(3)(b) of IGST Act provides that the place of supply shall be the location where the services are actually performed in case, where, a. services are supplied to an individual, b. represented either as the recipient of services or a person acting on behalf of the recipient, and c. which requires the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services 3.2.3 In the present ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to be the location of the said foreign client i.e. outside India as per Section 13(2) of IGST Act, and the said service can be considered to be export of services, subject to the fulfilment of conditions mentioned in section 2(6) of IGST Act. 5. However, there may be cases where the advertising company located in India merely acts as an agent of the foreign client in engaging with the media owner for providing media space to the foreign client. In such cases, the agreement/ contract for providing the media space and broadcast of the advertisement is directly between media owner and the foreign client. The media owner directly invoices the foreign client for providing the media space and broadcast of the advert....