Supply of advertising space on Myntra’s web platform attracts 18% GST

Bombay: The GST Authorization for Advance Rulings (RAA), Karnataka decided that an 18% goods and services tax would apply to the provision of advertising space by Myntra Designs on its fashion e-commerce portal for a fixed fee.
The company provided space on its web platform to Lenzing, a Singapore-based entity. The transaction was concluded with a non-resident entity and the consideration was received by Myntra in foreign currencies. Thus, she submitted to the AAR that the transaction is an export of services, which would not be subject to the GST.
Regarding one of the issues on which the advance ruling was sought, the AAR bench observed that the issue to be decided, whether the place of supply is outside India or not, does not fall within the jurisdiction of the Authority. Thus, the question of whether the transaction is taxable or not cannot be resolved.
She then ruled on the following classification issue and the consequence GST rate. Here, the AAR observed that the service provided by Myntra is that of carrying out the “sale of advertising space on the Internet (excluding commission)”. He charges a flat rate for his web space and this is classified under heading 9983 attracting 18% GST.
A Myntra spokesperson states, “Myntra has proactively sought clarification from the AAR regarding the tax exemption of an export transaction involving advertising space on its portal. that a domestic transaction of the same nature would continue to be taxed at 18%.
“We fully comply with all tax laws and this does not negatively affect us,” the spokesperson added.

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