Event organisers to gain ITC benefits as GST Council amends sponsorship tax

GST Council brings sponsorship services under forward charge mechanism

The Goods and Services Tax (GST) Council has decided to classify the supply of sponsorship services provided by corporate bodies under the forward charge mechanism (FCM), under which the supplier of service pays indirect tax. Currently, GST for sponsorship services was being paid in reverse charge mechanism (RCM), under which the recipient of service pays the tax. This change would allow the event organisers to also avail input tax credit (ITC).

 

Experts have lauded this decision taken at the 55th meeting of the GST Council held in Jaisalmer, stating that it will clarify the tax implications surrounding sponsorship services, which