PLACE OF SUPPLY OF ADVERTISEMENT SERVICES TO THE CENTRAL GOVERNMENT, STATE GOVERNMENT ETC.,

[Mr. M. GOVINDARAJAN]

Section 12 of the Integrated Goods and Services Tax Act, 2017 (‘Act’ for short) provides for the determination of place of supply of services where location of supplier and recipient is in India.

Section 12(14) of the Act provides that the place of supply of advertisement services to-

• the Central Government,
• a State Government,
• a Statutory body; or
• a local authority

meant for the States or Union territories identified in the contract or agreement shall be taken as being in each of such States or Union territories.  The value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be determined in terms of the contract or agreement entered into in this regard.  

In the absence of such contract or agreement, the same shall be determined in the following manner as per Rule 3 of the Integrated Goods and Services Tax Rules, 2017, which came into effect from 01.07.2017-

Advertisement in Newspapers

• In the case of newspapers and publishers the amount payable for publishing an advertisement in all editions of a newspaper or publication, which are published in a State or Union Territory is the value of advertisement attributable to the dissemination in such State or Union territory.

Advertisement in  pamphlets etc.,

• In the case of printed material like pamphlets, leaflets, diaries, calendars, T shirts etc., the amount payable for the distribution of a specific number of such materials in a particular State or Union territory is the value of advertisement service attributable to the dissemination in such State or Union territory, as the case may be.

Advertisement in hoardings

The advertisement in hoardings is classified into two for the purpose of this Rule as-

• Advertisement in the hoardings other than those on trains;
• Advertisement in the hoardings on the trains.

Advertisement in the hoardings other than those on trains

• In the case of hoardings other than those on trains, the amount payable for the hoardings located in each State or Union territory, is the value of advertisement service attributable to the dissemination in each such State or Union territory, as the case may be.

Advertisement in the hoardings on the trains

• In the case of advertisements placed on trains, the break up, calculated on the basis of the ratio of the length of the railway track in each State for that train, of the amount payable for such advertisements is the value of advertisement service attributable to the dissemination in such State or Union territory, as the case may be.

Advertisement on the back of utility bills

• In the case of advertisements on the back of utility bills of oil and gas companies etc., the amount payable for the advertisements on bills pertaining to consumers having billing address in such States or Union territory as the case may be, is the value of advertisement service attributable to dissemination in such State or Union territory.

Advertisements on railway tickets

• In the case of advertisements on railway tickets, the break up, calculated on the basis of the ratio of the number of railway station in each State or Union territory, when applied to the amount payable for such advertisements, shall constitute the value of advertisement service attributable to the dissemination in such State or Union territory, as the case may be.

Advertisement over radio stations

• In the case of advertisement over radio stations the amount payable to such radio station, which by virtue of its name is part of a State or Union territory, as the case may be, is the value of advertisement service attributable to dissemination in such State or Union territory, as the case may be.

Advertisement over television channels

• In the case of advertisement on television channels, the amount attributable to the value of advertisement service disseminated in a State shall be calculated on the basis of the viewership of such channel in such State, which in turn, shall be calculated in the following manner-

• the channel viewership figures for that channel for a State or Union territory shall be taken from the figures published by the Broadcast Audience Research Council;
• the figures published for the last week of a given quarter shall be used for calculating viewership for the succeeding quarter and at the beginning, the figures for the quarter 1^st July, 2017 to 30^th September, 2017 shall be used for the succeeding quarters 1^st October,2017 to 31^st December 2017.
• where such channel viewership figures relate to a region comprising of more than one State or Union territory, the viewership figures for a State or Union territory of that region, shall be calculated by applying the ratio of the populations of that State or Union territory, as determined in the latest Census, to such viewership figures.
• the ratio of the viewership figures for each State or Union territory as so calculated, when applied to the amount payable for that service, shall represent the portion of the value attributable to the dissemination in that State or Union territory.

Advertisement in Cinema Halls

• In the case of advertisements at cinema halls the amount payable to a cinema hall or screens in a multiplex, in a State or Union territory, as the case may be, is the value of advertisement service attributable to dissemination in such State or Union territory, as the case may be.

Advertisements over internet

• In the case of advertisements over internet, the amount attributable to the value of advertisement service disseminated in a State or Union territory shall be calculated on the basis of internet subscribers in such State or Union territory, which in turn, shall be calculated in the following manner-

• the internet subscriber figures for a State shall be taken from the figures published in this regard by the Telecom Regulatory Authority of India;
• the figures published for the last quarter in a given financial year shall be used for calculating the number of internet subscribers for the succeeding financial year and at the beginning, the figures for the last quarter of financial year 2016 -2017 shall be used for the succeeding financial year 2017 -18;
• where such internet subscriber figures relate to a region comprising of more than one State or Union territory, the subscriber figures for a State or Union territory of that region, shall be calculated by supplying the ratio of the populations of that State or Union territory, as determined in the latest census, to such subscriber figures;
• the ratio of the subscriber figures for each State or Union territory as so calculated, when applied to the amount payable for this service, shall represent the portion of the value attributable to the dissemination in that State or Union territory.

Advertisement through SMS

• In the case of advertisements through SMS, the amount attributable to the value of advertisement service disseminated in a State or Union territory shall be calculated on the basis of the telecommunication subscribers in such State or Union territory, which in turn, shall be calculated in the following manner-

• the number of telecom subscribers in a telecom circle shall be ascertained from the figures published by the Telecom Regulatory Authority of India on its website www.trai.gov.in.
• the figures published for a given quarter, shall be used for calculating subscribers for the succeeding quarter and at the beginning, the figures for the quarter 1^st July, 2017 to 30^th September, 2017 shall be used for the succeeding quarter 1^st October, 2017 to 31^st December, 2017;
• where such figures relate to a telecom circle comprising of more than one State or Union territory, the subscriber figures for that State or Union territory shall be calculated by applying the ratio of the populations of that State or Union territory, as determined in the latest census, to such subscriber figures
• the ratio of the subscriber figures for each State or Union territory as so calculated, when applied to the amount payable for that service, shall represent the portion of the value attributableto the dissemination in that State or Union territory.

Discussions to this article

[Nikhil Mathur]

Sir,

In this notification, whether advertisement on buses is also covered and if covered under which clause ?