Display of advertisement by board, Goods and Services Tax - GST

[YUWRAJ KOTHARI]

In the case of Bar Restaurant, display of advertisement by board is made for liquor vendor in small place, for the place of liquor vendor pay yearly charges. There is no agreement, no invoice raised for place provided of any nature. In spite any self invoice required or whether GST is to be paid.

Posts / Replies

[Shilpi Jain]

This will be liable under forward charge mechanism in the hands of the restaurant.

[KASTURI SETHI]

There is supplier of taxable service.

There is recipient of taxable service.

There is consideration.

In case threshold turnover of 20 lakhs in a year has crossed, apply for GSTIN and pay GST.

[YAGAY andSUN]

In the case of a Bar Restaurant displaying an advertisement board for a liquor vendor in exchange for yearly charges, several key points need to be considered to determine whether GST is payable and if any self-invoicing is required.

Let's break this down:

1. Nature of the Transaction

From your description:

• The liquor vendor is paying yearly charges to the Bar Restaurant for the display of an advertisement.
• There is no formal agreement in place, and no invoice is raised for the space provided for the advertisement.

This implies that the Bar Restaurant is providing a space for display (a form of service) to the liquor vendor, and in return, the liquor vendor is paying a fee.

2. GST on Advertising Services

According to the GST Act, the display of advertisements (or providing space for advertisements) is considered a service under Section 7 of the CGST Act. This type of service would fall under the category of “Advertising services” and is taxable under GST.

Since there is a payment involved, the transaction is considered a taxable supply, and GST is applicable.

3. Invoice Requirements

Even though there is no formal written agreement, the Bar Restaurant is providing a taxable service (advertisement space), and a transaction is occurring (payment by the liquor vendor). In this case:

• Invoice must be raised for the service provided, and GST should be charged accordingly.
• Self-invoicing: If the liquor vendor is not issuing an invoice (and the Bar Restaurant does not issue one), a self-invoice may be required under GST. This would mean that the Bar Restaurant would need to raise the invoice on its own and pay GST on the amount received from the liquor vendor.

However, self-invoicing typically applies to specific cases such as reverse charge mechanisms or in the case where the buyer (liquor vendor) is responsible for paying GST, which doesn’t seem to apply directly here unless there are reverse charge provisions applicable (e.g., if the service was provided by an unregistered person). In most cases, the Bar Restaurant will raise an invoice and collect GST from the liquor vendor.

4. GST Liabilities

• GST is applicable on the yearly charges paid by the liquor vendor to the Bar Restaurant for the advertisement space.
• The Bar Restaurant must charge GST on the amount it receives as payment from the liquor vendor for the advertisement space provided.
• If the liquor vendor is registered under GST, it may claim the GST paid as an Input Tax Credit (ITC).

5. Conclusion

• GST is applicable on the space provided by the Bar Restaurant for advertisement purposes, and the Bar Restaurant is required to raise an invoice for the charges received from the liquor vendor.
• If there is no formal agreement or written contract, the Bar Restaurant still needs to ensure GST is charged on the payment received, and an invoice should be issued.
• Self-invoicing would not generally be required in this situation, as it would typically apply to reverse charge scenarios or cases where the supplier is unregistered. However, the Bar Restaurant must issue the invoice for the service provided.

Therefore, in this case, GST should be paid and invoiced by the Bar Restaurant for the advertisement service provided to the liquor vendor.