Question4:

We are the manufacturers of tires under HS code 4011 and have exports all over the world, one of such countries being Bhutan. Now we wish to conduct a business exhibition in Bhutan. We shall be paying the service provider (Bhutan based) in INR who is organizing this exhibition on our behalf. As per the provisions of Section 13 (5) of IGST Act, 2017, place of supply of service in such case will be the location where the event takes place. In our case, it is Bhutan. Thus, we feel that this will be ‘import of services’ and we shall be required to pay IGST @ 18% under HS code 9983 (ii). We shall be availing ITC of the IGST so paid.

Answer:

Your event is organized outside India. The event organizer (service provider) is based in Bhutan i.e. outside India, therefore, you have rightly applied provisions of Section 13(5) of IGST Act, 2017. The event is not covered under GST, hence, not taxable. The relevant provision of above sad sub-Section is reproduced below; Section 13: Place of supply of services where location of supplier or location of recipient is outside India. (5) The place of supply of services supplied by way of admission to, or organization of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organization, shall be the place where the event is actually held. More detailed interpretation would follow soon. (Reply dt.06/10/2017)