TaxTMI 
TaxTMI 
Clarification in respect of advertising services provided to foreign clients
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....Computer No. 1531175 File No: REV03-12039/72/2021-CCT Dt.11.10.2021 3. Central Circular No.230/24/2024-GST, dated 10.09.2024 issued by the Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi. *** ORDER: References have been received from the trade and industry requesting for clarification regarding advertising services being provided by Indian advertising companies/agencies to foreign entities, as some of the field formations are considering the place of supply of the said services as within India, thereby denying the export benefits to such advertising companies. 1.2 In view of the difficulties being faced by the trade and industry and to ensure uniformity i....
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...."intermediary" between the foreign client and the media owners in terms of section 2(13) of Integrated Goods and Services Tax Act, 2017 (herein after referred to as the "IGST Act"), thereby resulting in determination of place of supply under section 13(8)(b) of the IGST Act? b. Whether the representative of foreign client in India or the target audience of the advertisement in India can be considered as the recipient of the services being supplied by the advertising company under section 2(93) of APGST Act? c. Whether the advertising services provided by the advertising companies to foreign clients can be considered as performance-based services as per section 13(3) of the IGST Act? 3. CLARIFICATION: 3.1 Issue 1....
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....y 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 payment for same is made by the advertising agency to the media company. 3.1.4 Thus, the agreement, in the instant case, is in the nature of two distinct principal-to- principal supplies and no agreement of supply of services exists between the Media company and the foreign client. The advertising company is not acting as an agent but has been contracted by the client to procure and provide certain services. The advertising agency is providing the services to the client on its own account. 3.1.5 In view of above, it is clarified that in ....
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....tative 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 is being issued for the said service by the advertising company to the foreign client and the payment for the said service is received by the advertising company directly from the said foreign client. Further, the target audience of the advertisements may be based in India but such target audience cannot be considered as recipient of the said advertising services being supplied by the advertising company as per the definition of the recipient under section 2(93) of APGST Act. 3.2.3 Therefore, in view of above, it is clarified that the recipient of the advertising services ....
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....hysical 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 scenario, the supply of advertising services does not require physical presence of the recipient (foreign client or representative or a person acting on his behalf) with the advertising company for availing the said advertising services. Thus, the said supply of advertising services cannot be considered as being covered under section 13(3)(b) of the IGST Act for being considered as the services actually performed in India in terms of the said section. 3.3.3 Accordingly, it is clarified that the place of supply of advertising services in such cases can neither be determined as per the provi....
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.... providing the media space and broadcast of the advertisement and the foreign client remits the payment for the said services directly to the media owner. In such instances, the services of providing media space and broadcasting the advertisement are directly provided by the media owner to the foreign client. In such cases, the advertising company is merely facilitating the provision of the said services of providing media space and broadcasting the advertisement between the foreign client and the media owner and does not provide the said services on its own account. The advertising company invoices the foreign client for the facilitation services provided by it. 5.1 Consequently, in such cases, the advertising company is an "intermediar....