Classification of service— In the instant case, the applicant is engaged in the business of selling of fashion and lifestyle products through the e-commerce portal “Myntra”.

The applicant has sought advance ruling in respect of the following questions:-

a. Whether the transaction of the Applicant of providing space on its web-portal for advertisements provided by a foreign entity i.e., Lenzing Singapore Pte Limited for a consideration, is taxable?

b. Consequently, 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 i.e., Lenzing Singapore Pte Limited?

The transaction involved in the question is analysed and found that the applicant owns an e-commerce portal through which he is providing services of e-platform to the suppliers of fashion and lifestyle products. In his portal, the applicant is also providing the advertisement space for the persons who wish to advertise either their products or for advertisers. The issue before us is about the tax treatment when the space is provided to the advertisers for advertisement.

Held that— 

a. No Advance ruling is given on this issue as the question involves the determination of place of supply, which is outside the jurisdiction of this Authority.

b. 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 exigible 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.