Import of service with consideration is supply even if not for business purpose.
So if I pay facebook to promote my posts or articles, what are GST implications on this?
7 Replies
CA Haritha Komma
(Chartered Accountant)
(1147 Points)
Replied 10 August 2019
As per sec 24(xi) of the CGST Act, every person providing OIDAR services from outside to an unregistered person in India, has to get himself mandatorily registered under GST and pay taxes..
Hence, facebook may have to take registration in India and pay GST..
pradeep goyal
(Senior Partner)
(7561 Points)
Replied 10 August 2019
correct some extent. what about recipient as section 7 says import of services is taxable meaning thereby it is talking about recipient. why not recipient is liable to pay under reverse charge as it is covered in RCM notified services IGST Notification ? as per GST laws, even if supplier pays, recipient still is liable if under RCM.
CA Haritha Komma
(Chartered Accountant)
(1147 Points)
Replied 10 August 2019
The relevant entry of RCM notificaiton 10/2017-IGST is as follws:
Any service supplied by any person who is located in a non-taxable territory to any person other than nontaxable online recipient.
The term is defined in sec 2(16) of IGST Act which includes unregistered person receiving OIDAR services..
Hence, there is no RCM in the present case and facebook need to pay GST as discussed earlier.
pradeep goyal
(Senior Partner)
(7561 Points)
Replied 10 August 2019
yes now it is clear. extending it, what about services other than OIDAR? suppose I am getting services of a UK based architect on cosideration for my home design.
CA Haritha Komma
(Chartered Accountant)
(1147 Points)
Replied 10 August 2019
Exemption is available to such services as per 9/2017-IGST
Services received from a provider of service located in a non- taxable territory by – (a) the Central Government, State Government, Union territory, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession;
Hence, they are exempted..
pradeep goyal
(Senior Partner)
(7561 Points)
Replied 10 August 2019
wonderful sir. now we both matched. all social media platforms are registered with GST Commissionerate Baglore and paying taxes under forward charge for advertisement & promotion services to unregistered persons. big issue is most of Registered persons are not paying Tax under RCM for various services they avail, you will find if check profit & loss of any mid size company thoroughly
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