The Integrated Goods and Services Tax Act, 2017

IGST Rules

The Integrated Goods and Services Tax Act, 2017

Official text

Integrated Goods and Services Tax (IGST) Rules,

2017

Notified vide Notification No. 4 /2017-Integrated Tax (Dated 28th June 2017) and further as amended by

Notification No. 12/2017-Integrated Tax (Dated 15th November, 2017)

(As on 15.11.2017)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

1. Short title and commencement.-(1) These rules may be called the Integrated Goods and

Services Tax Rules, 2017.

(2) They shall be deemed to have come into force on the 22nd day of June, 2017.

2. Application of Central Goods and Services Tax Rules.- The Central Goods and Services

Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated

Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax

as they apply in relation to central tax.

[3. The proportion of value attributable to different States or Union territories, in the case of

supply of advertisement services to the Central Government, a State Government, a statutory

body or a local authority, under sub section (14) of section 12 of the Integrated Goods and

Services Tax Act, 2017, in the absence of any contract between the supplier of service and

recipient of services, shall be determined in the following manner namely:-

(a) In the case of newspapers and publications, the amount payable for publishing an

advertisement in all the editions of a newspaper or publication, which are published in

a State or Union territory, as the case may be, is the value of advertisement service

attributable to the dissemination in such State or Union territory.

Illustration: ABC is a government agency which deals with the all the

advertisement and publicity of the Government. It has various wings dealing with

various types of publicity. In furtherance thereof, it issues release orders to various

agencies and entities. These agencies and entities thereafter provide the service and

then issue invoices to ABC indicating the amount to be paid by them. ABC issues a

release order to a newspaper for an advertisement on ‘Beti bachao beti padhao’, to

be published in the newspaper DEF (whose head office is in Delhi) for the editions of

Delhi, Pune, Mumbai, Lucknow and Jaipur. The release order will have details of the

newspaper like the periodicity, language, size of the advertisement and the amount to

be paid to such a newspaper. The place of supply of this service shall be in the Union

territory of Delhi, and the States of Maharashtra, Uttar Pradesh and Rajasthan. The

amounts payable to the Pune and Mumbai editions would constitute the proportion of

value for the state of Maharashtra which is attributable to the dissemination in

Maharashtra. Likewise the amount payable to the Delhi, Lucknow and Jaipur editions

would constitute the proportion of value attributable to the dissemination in the

Union territory of Delhi and States of Uttar Pradesh and Rajasthan respectively. DEF

should issue separate State wise and Union territory wise invoices based on the

editions.

(b) in the case of printed material like pamphlets, leaflets, diaries, calendars, T shirts

etc, the amount payable for the distribution of a specific number of such material in a

particular State or Union territory is the value of advertisement service attributable to

the dissemination in such State or Union territory, as the case may be.

Illustration: As a part of the campaign ‘Swachh Bharat’, ABC has engaged a

company GH for printing of one lakh pamphlets( at a total cost of one lakh rupees) to

be distributed in the states of Haryana, Uttar Pradesh and Rajasthan. In such a case,

ABC should ascertain the breakup of the pamphlets to be distributed in each of the

three States i.e. Haryana, Uttar Pradesh and Rajasthan, from the Ministry or

department concerned at the time of giving the print order. Let us assume that this

breakup is twenty thousand, fifty thousand and thirty thousand respectively. This

breakup should be indicated in the print order. The place of supply of this service is

in Haryana , Uttar Pradesh and Rajasthan. The ratio of this breakup i.e 2:5:3 will

form the basis of value attributable to the dissemination in each of the three

States.Separate invoices will have to be issued State wise by GH to ABC indicating

the value pertaining to that State i.etwenty thousand rupees- Haryana, fifty thousand

rupees- Uttar Pradesh and thirty thousand rupees- Rajasthan.

the hoardings located in each State or Union territory, as the case may be, is the value

of advertisement service attributable to the dissemination in each such State or Union

territory, as the case may be.

Illustration: ABC as part of the campaign ‘Saakshar Bharat’ has engaged a

firm IJ for putting up hoardings near the Airports in the four metros i.e. Delhi,

Mumbai, Chennai and Kolkata . The release order issued by ABC to IJ will have the

citywise, locationwise breakup of the amount payable for such hoardings. The place of

supply of this service is in the Union territory of Delhi and the States of Maharashtra,

Tamil Nadu and West Bengal. In such a case, the amount actually paid to IJ for the

hoardings in each of the four metros will constitute the value attributable to the

dissemination in theUnion territory of Delhi and the States of Maharashtra, Tamil

Nadu and West Bengal respectively. Separate invoices will have to be issued State

wise and Union territory wise by IJ to ABC indicating the value pertaining to that

State or Union territory.

(ii) in the case of advertisements placed on trains, the breakup, calculated

on the basis of the ratio of the length of the railway track in each State for that train,

of the amount payable for such advertisements is the value of advertisement service

attributable to the dissemination in such State or Union territory, as the case may be.

Illustration: ABC places an order on KL for advertisements to be placed on a

train with regard to the “Janani Suraksha Yojana”. The length of a track in a state

will vary from train to train. Thus for advertisements to be placed on the Hazrat

Nizamuddin Vasco Da Gama Goa Express which runs through Delhi, Haryana, Uttar

Pradesh, Madhya Pradesh, Maharashtra, Karnataka and Goa, KL may ascertain the

total length of the track from Hazrat Nizamuddin to Vasco Da Gama as well as the

length of the track in each of these States and Union territory from the website

www.indianrail.gov.in. The place of supply of this service is in the Union territory of

Delhi and States of Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra,

Karnataka and Goa. The value of the supply in each of these States and Union

territory attributable to the dissemination in these States will be in the ratio of the

length of the track in each of these States and Union territory. If this ratio works out to

say 0.5:0.5: 2:2 :3:3:1 , and the amount to be paid to KL is one lakh twenty thousand

rupees, then KL will have to calculate the Statewise and Union territory wise breakup

of the value of the service, which will be in the ratio of the length of the track in each

State and Union territory. In the given example the Statewise and Union territory

wise breakup works out to Delhi (five thousand rupees), Haryana( five thousand

rupees), Uttar Pradesh (twenty thousand rupees), Madhya Pradesh (twenty thousand

rupees), Maharashtra (thirty thousand rupees), Karnataka (thirty thousand rupees)

http://www.indianrail.gov.in/

and Goa (ten thousand rupees). Separate invoices will have to be issued State wise

and Union territory wise by KL to ABC indicating the value pertaining to that State or

Union territory.

(d) (i) in the case of advertisements on the back of utility bills of oil and gas

companies etc, the amount payable for the advertisements on bills pertaining to

consumers having billing addresses in such States or Union territory as the case may

be, is the value of advertisement service attributable to dissemination in such State

or Union territory.

(ii) in the case of advertisements on railway tickets, the breakup,

calculated on the basis of the ratio of the number of Railway Stations in each State or

Union territory, when applied to the amount payable for such advertisements, shall

constitute the value of advertisement service attributable to the dissemination in such

State or Union territory, as the case may be.

Illustration: ABC has issued a release order to MN for display of

advertisements relating to the “Ujjwala” scheme on the railway tickets that are sold

from all the Stations in the States of Madhya Pradesh and Chattisgarh. The place of

supply of this service is in Madhya Pradesh and Chattisgarh. The value of

advertisement service attributable to these two States will be in the ratio of the

number of railway stations in each State as ascertained from the Railways or from the

website www.indianrail.gov.in. . Let us assume that this ratio is 713:251 and the total

bill is rupees nine thousand six hundred and forty. The breakup of the amount

between Madhya Pradesh and Chattisgarh in this ratio of 713:251 works out to seven

thousand one hundred and thirty rupees and two thousand five hundred and ten

rupees respectively. Separate invoices will have to be issued State wise by MN to ABC

indicating the value pertaining to that State .

(e) in the case of advertisements over radio stations the amount payable to such radio

station, which by virtue of its name is part of a State or Union territory, as the case

may be, is the value of advertisement service attributable to dissemination in such

State or Union territory, as the case may be.

Illustration: For an advertisement on ‘Pradhan Mantri Ujjwala Yojana’, to be

broadcast on a FM radio station OP, for the radio stations of OP Kolkata, OP

Bhubaneswar, OP Patna, OP Ranchi and OP Delhi, the release order issued by

ABC will show the breakup of the amount which is to be paid to each of these radio

stations. The place of supply of this service is in West Bengal, Odisha, Bihar,

Jharkhand and Delhi. The place of supply of OP Delhi is in Delhi even though the

studio may be physically located in another state. Separate invoices will have to be

issued State wise and Union territory wise by MN to ABC based on the value

pertaining to each State or Union territory.

(f) in the case of advertisement on television channels, the amount attributable to the

value of advertisement service disseminated in a State shall be calculated on the basis

of the viewership of such channel in such State, which in turn, shall be calculated in

the following manner, namely: -

http://www.indianrail.gov.in/

(i) the channel viewership figures for that channel for a State or

Union territory shall be taken from the figures published in this regard by the

Broadcast Audience Research Council;

(ii) the figures published for the last week of a given quarter shall

be used for calculating viewership for the succeeding quarter and at the

beginning, the figures for the quarter 1st July, 2017 to 30th September, 2017

shall be used for the succeeding quarter 1st October, 2017 to 31st December,

2017;

(iii) where such channel viewership figures relate to a region

comprising of more than one State or Union territory, the viewership figures

for a State or Union territory of that region, shall be calculated by applying the

ratio of the populations of that State or Union territory, as determined in the

latest Census, to such viewership figures;

(iv) the ratio of the viewership figures for each State or Union

territory as so calculated, when applied to the amount payable for that service,

shall represent the portion of the value attributable to the dissemination in that

State or Union territory.

Illustration:ABC issues a release order with QR channel for telecasting

an advertisement relating to the “Pradhan Mantri Kaushal Vikas Yojana” in

the month of November, 2017. In the first phase, this will be telecast in the

Union territory of Delhi, States of Uttar Pradesh, Uttarakhand, Bihar and

Jharkhand. The place of supply of this service is in Delhi, Uttar Pradesh,

Uttarakhand, Bihar and Jharkhand. In order to calculate the value of supply

attributable to Delhi , Uttar Pradesh, Uttarakhand, Bihar and Jharkhand, QR

has to proceed as under—

I.QR will ascertain the viewership figures for their channel in the last week of

September 2017 from the Broadcast Audience Research Council. Let us

assume it is one lakh for Delhi and two lakhs for the region comprising of

Uttar Pradesh and Uttarakhand and one lakh for the region comprising of

Bihar and Jharkhand;

II. since the Broadcast Audience Research Council clubs Uttar Pradesh and

Uttarakhand into one region and Bihar and Jharkhand into another region,

QR will ascertain the population figures for Uttar Pradesh , Uttarakhand ,

Bihar and Jharkhand from the latest census;

III. by applying the ratio of the populations of Uttar Pradesh and

Uttarakhand, as so ascertained, to the Broadcast Audience Research Council

viewership figures for their channel for this region, the viewership figures for

Uttar Pradesh and Uttarakhand and consequently the ratio of these viewership

figures can be calculated. Let us assume that the ratio of the populations of

Uttar Pradesh and Uttarakhand works out to 9: 1. When this ratio is applied

to the viewership figures of two lakhs for this region, the viewership figures for

Uttar Pradesh and Uttarakhand work out to one lakh eighty thousand and

twenty thousand respectively;

IV. in a similar manner the breakup of the viewership figures for Bihar and

Jharkhand can be calculated. Let us assume that the ratio of populations is

4:1 and when this is applied to the viewership figure of one lakh for this

region, the viewership figure for Bihar and Jharkhand works out to eighty

thousand and twenty thousand respectively;

V. the viewership figure for each State works out to Delhi (one lakh), Uttar

Pradesh (one lakh eighty thousand), Uttarakhand (twenty thousand), Bihar

(eighty thousand) and Jharkhand (twenty thousand). The ratio is thus

10:18:2:8:2 or 5:9:1:4:1(simplification).

VI .this ratio has to be applied when indicating the breakup of the amount

pertaining to each State. Thus if the total amount payable to QR by ABC is

twenty lakh rupees, the State wise breakup is five lakh rupees(Delhi), nine

lakh rupees (Uttar Pradesh) one lakh rupees (Uttarakhand), four lakh rupees

(Bihar) and one lakh rupees ( Jharkhand). Separate invoices will have to be

issued State wise and Union territory wise by QR to ABC indicating the value

pertaining to that Stateor Union territory.

(g) in the case of advertisements at cinema halls the amount payable to a cinema

hall or screens in a multiplex, in a State or Union territory, as the case may be, is

the value of advertisement service attributable to dissemination in such State or Union

territory, as the case may be.

Illustration: ABC commissions ST for an advertisement on ‘Pradhan Mantri

Awas Yojana’ to be displayed in the cinema halls in Chennai and Hyderabad. The

place of supply of this service is in the states of Tamil Nadu and Telengana. The

amount actually paid to the cinema hall or screens in a multiplex, in Tamil Nadu and

Telangana as the case may be, is the value of advertisement service in Tamil Nadu

and Telangana respectively. Separate invoices will have to be issued State wise and

Union territory wise by ST to ABC indicating the value pertaining to that State.

(h) in the case of advertisements over internet, the amount attributable to the value

of advertisement service disseminated in a State or Union territory shall be calculated

on the basis of the internet subscribers in such State or Union territory, which in

turn, shall be calculated in the following manner, namely:-

(i) the internet subscriber figures for a State shall be taken from the

figures published in this regard by the Telecom Regulatory Authority of India ;

(ii) the figures published for the last quarter of a given financial year

shall be used for calculating the number of internet subscribers for the

succeeding financial year and at the beginning, the figures for the last quarter

of financial year 2016- 2017 shall be used for the succeeding financial year

2017-2018;

(iii) where such internet subscriber figures relate to a region

comprising of more than one State or Union territory, the subscriber figures

for a State or Union territory of that region, shall be calculated by applying the

ratio of the populations of that State or Union territory , as determined in the

latest census, to such subscriber figures;

(iv) the ratio of the subscriber figures for each State or Union territory

as so calculated, when applied to the amount payable for this service, shall

represent the portion of the value attributable to the dissemination in that State

or Union territory.

Illustration: ABC issues a release order to WX for a campaign over

internet regarding linking Aadhaar with one’s bank account and mobile

number. WX runs this campaign over certain websites. In order to ascertain

the statewise breakup of the value of this service which is to be reflected in the

invoice issued by WX to ABC, WX has to first refer to the Telecom Regulatory

Authority of India figures for quarter ending March, 2017, as indicated on

their website www.trai.gov.in. These figures show the service area wise

internet subscribers. There are twenty two service areas. Some relate to

individual States some to two or more States and some to part of one State and

another complete State. Some of these areas are metropolitan areas. In order

to calculate the State wise breakup, first the State wise breakup of the number

of internet subscribers is arrived at. (In case figures of internet subscribers of

one or more States are clubbed, the subscribers in each State is to be arrived

at by applying the ratio of the respective populations of these States as per the

latest census.). Once the actual number of subscribers for each State has been

determined, the second step for WX involves calculating the State wise ratio of

internet subscribers. Let us assume that this works out to 8: 1 : 2… and so on

for Andhra Pradesh, Arunachal Pradesh, Assam….. and so on. The third step

for WX will be to apply these ratios to the total amount payable to WX so as to

arrive at the value attributable to each State. Separate invoices will have to be

issued State wise and Union territory wise by WX to ABC indicating the value

pertaining to that State or Union territory.

(i) in the case of advertisements through short messaging service the amount

attributable to the value of advertisement service disseminated in a State or Union

territory shall be calculated on the basis of the telecommunication( herein after

referred to as telecom) subscribers in such State or Union territory , which in turn,

shall be calculated in the following manner, namely:-

(a) the number of telecom subscribers in a telecom circle shall be ascertained

from the figures published by the Telecom Regulatory Authority of India on its

website www.trai.gov.in ;

(b) the figures published for a given quarter, shall be used for calculating

subscribers for the succeeding quarter and at the beginning , the figures for the

quarter 1st July, 2017 to 30th September, 2017 shall be used for the succeeding

quarter 1st October, 2017 to 31st December, 2017;

State, or Union territory, the subscriber figures for that State or Union territory

shall be calculated by applying the ratio of the populations of that State or Union

territory, as determined in the latest census, to such subscriber figures.

Illustration-1: In the case of the telecom circle of Assam, the amount

attributed to the telecom circle of Assam is the value of advertisement service in

Assam.

Illustration-2: The telecom circle of North East covers the States of

Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Manipur and Tripura. The

ratio of populations of each of these States in the latest census will have to be

determined and this ratio applied to the total number of subscribers for this

telecom circle so as to arrive at the State wise figures of telecom subscribers.

Separate invoices will have to be issued State wise by the service provider to

ABC indicating the value pertaining to that State.

Illustration-3: ABC commissions UV to send short messaging service to

voters asking them to exercise their franchise in elections to be held in

Maharashtra and Goa. The place of supply of this service is in Maharashtra and

Goa. The telecom circle of Maharashtra consists of the area of the State of

Maharashtra (excluding the areas covered by Mumbai which forms another

http://www.trai.gov.in/

circle) and the State of Goa. When calculating the number of subscribers

pertaining to Maharashtra and Goa, UV has to -

I. obtain the subscriber figures for Maharashtra circle and Mumbai circle and

add them to obtain a combined figure of subscribers;

II. obtain the figures of the population of Maharashtra and Goa from the latest

census and derive the ratio of these two populations;

III. this ratio will then have to be applied to the combined figure of subscribers so

as to arrive at the separate figures of subscribers pertaining to Maharashtra

and Goa;

IV the ratio of these subscribers when applied to the amount payable for the short

messaging service in Maharashtra circle and Mumbai circle, will give breakup of

the amount pertaining to Maharashtra and Goa. Separate invoices will have to be

issued State wise by UV to ABC indicating the value pertaining to that State.

Illustration-4: The telecom circle of Andhra Pradesh consists of the areas

of the States of Andhra Pradesh, Telangana and Yanam, an area of the Union

territory of Puducherry. The subscribers attributable to Telangana and Yanam

will have to be excluded when calculating the subscribers pertaining to Andhra

Pradesh.

(d) the ratio of the subscriber figures for each State or Union territory as so

calculated, when applied to the amount payable for that service, shall represent

the portion of the value attributable to the dissemination in that State or Union

territory.]1

Inserted vide Notf No. 12/2017-Integrated Tax dated 15.11.2017, and deemed to have come into force on

01.07.2017

Integrated Goods and Services Tax (IGST) Rules, 2017