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TMI BlogClarification in respect of advertising services provided to foreign clientsX X X X Extracts X X X X X X X X Extracts X X X X ..... stry of Finance, Government of India, New Delhi has issued the above referred Circular. For the uniformity in implementation and in exercise of the powers conferred under Section 168 of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017) it is hereby directed that the Said Circular issued by the GST Policy Wing, Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India shall be applicable, mutatis mutandis, in implementation of the Goa Goods and Services Tax Act, 2017 (Goa Act 4 of 2017). A copy of the above referred circular is attached herewith as Annexure. Difficulty, if any, in implementation of this circular may please be brought to the notice of the undersigned. Given under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and may enter into a comprehensive agreement with the advertising company/agency encompassing all the issues related to advertising services ranging from media planning, investment planning for the same, creating and designing content, strategizing for maximum customer reach, the identification of media owners, dealing with media owners, procuring media space, etc. for displaying/broadcasting/printing of advertisement including monitoring of the progress of the 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant scenario, it is observed that the foreign clients enter into a comprehensive agreement with advertising companies/agencies in India and outsource the entire activity of advertising services to the advertising companies/agencies. Further, these advertising companies/agencies enter into an agreement with the media owners in India for implementing 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 fore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence 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 CGST Act? 3.2.1 As per Section 2(93)(a) of the CGST Act, the recipient of the services means the person who is liable 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be made physically available by the recipient of services to the supplier of services. However, in the instant matter, there does not appear to be any such involvement of goods which are required 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 rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign client, who is located outside India, the place of supply of the said services appears 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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