Order Date: 01 July 2022

Facts:

• The Applicant M/s. Myntra Designs Private Limited, owns an e-commerce portal www.myntra.com and is a major Indian fashion e-commerce company and is also engaged in the business of selling of fashion and lifestyle products through the said e-commerce portal. 
• The Applicant is providing space on the web-platform to a non-resident foreign company for placing and displaying graphical impressions of the advertisement material for a consideration.

Issue:

• What will be the correct classification of the services provided and rate of tax on the transaction of the Applicant of providing space on its web-portal for advertisements provided by a foreign entity?

Order:

• The Authorities observed that the services provided by the applicant to M/s Lenzing is that of rendering “Sale of internet Advertising Space (except on commission)” and is charging a fixed rate and not a commission for providing such space. 
• Hence, the services provided by the applicant are classified under SAC 998365 which reads “Sale of internet Advertising Space (except on commission)” under the Heading 9983 and the same is eligible to CGST at 9% and SGST at 9% as per SI. No. 21 of Notification No. 11/2017-Central Tax (Rate) dated: 28.06.2017.