The 55th GST Council met under the Chairpersonship of Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman in Jaisalmer, Rajasthan, today.
The council has recommended to bring supply of the sponsorship services provided by the body corporates under Forward Charge Mechanism.
The forward charge mechanism (FCM) under GST refers to a taxation method where the supplier of goods or services is liable to pay the tax. Unlike the reverse charge mechanism, where the recipient is responsible for the tax, the forward charge ensures that the supplier accounts for the GST at the point of supply.
The body corporate will be responsible for charging and collecting the GST on the value of the sponsorship services provided.
For example, if a body corporate provides Rs. 1,00,000 worth of sponsorship services, it would charge GST in addition to the sponsorship fee.
The body corporate would then remit the GST to the government.
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