The Government of West Bengal on October 04, 2024, issued clarifications in respect of advertising services provided to foreign clients.
The following has been stated: -
•The Commissioner has addressed concerns from trade and industry regarding the classification of advertising services provided by Indian agencies to foreign clients. Some field formations have mistakenly categorized these services as being supplied within India, thus denying export benefits.
•When a foreign company hires an Indian advertising agency, that provides comprehensive advertising solutions—from media planning to content creation—the agency engages with media owners in India to fulfill these services. The key issues include whether the advertising agency acts as an "intermediary" under section 2(13) of the IGST Act.
•The clarification states that since the foreign client outsources the entire advertising activity to the agency, and the agency directly invoices the client in foreign exchange, the agency is not merely an intermediary but a service provider, thus eligible for export benefits.
The detailed circular is given in the document below.
[Trade Circular No. 23/2024]
