How to apportion IGST for Advertisement provided to Govt

By | November 22, 2017
(Last Updated On: November 22, 2017)


Apportionment of IGST credit with respect to Advertisement service when provided to Government

The Central Government vide Notification no.12/2017-Integrated Tax dated. 15th November,2017 has inserted new rule 3 to the IGST Rules, 2017 to determine the value attributable to different States or Union Territories, in the case of supply of advertisement services to the Central Government, State Government, a statutory body or a local authority, in the absence of any contract between the supplier of service and recipient of services.

Value attributable to the dissemination in each State or Union Territory shall be determined in the following manner: –

Mode of AdvertisementBasis of allocation
(a)Advertisements on Newspapers and publications

Amount payable for publishing an advertisement in all the editions of newspaper or publications which are published in each State or Union Territory

(b)Advertisements on Printed material like pamphlets, leaflets, diaries, calendars, t-shirt etc.

Amount payable for the distribution of a specific number of such material in each State or UT

(c)(i) Advertisements on Hoardings other than on trainsAmount payable for the hoardings located in each State or UT
(ii) Advertisements placed on trainsRatio of the length of railway track in each State of that train
(d)(i) Advertisements on back of utility bills of oil and gas companies etc.Amount payable for the advertisements on bills pertaining to consumers having billing address in such States or Union Territory
(ii) Advertisements on railway ticketsRatio of number of railway stations in each State or Union Territory
(e)Advertisement over radio stationsAmount payable to such radio station, which by virtue of its name is part of a State or Union Territory
(f)Advertisements on Television channelsRatio of the viewership of such channel in such State

(last week of a given quarter shall be used for calculating viewership for the succeeding quarter

(g)Advertisements at cinema hallsAmount payable to a cinema halls or screens in a State or Union Territory
(h)Advertisements over internetRatio of internet subscribers in such State or Union Territory
(i)Advertisements through short messaging serviceRatio of telecommunication subscribers in such State or Union Territory

Various examples to the above situations have been explained in the Notification which may be referred.

Comment: Please note that IGST Rules had adopted the CGST Rules in its entirety and with the introduction of this rule, value apportionment is being prescribed for purposes of payment of IGST or CGST-SGST as the case may be. As such, this rule appears to affect valuation of CGST-SGST supplies also but without a corresponding change in the CGST Rules.

[ Notification no.12/2017-Integrated Tax dated. 15th November,2017]

Source : Indirect Taxes Committee

The Institute of Chartered Accountants of India

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