Advertising Services to Foreign Clients not Classified as Performance – Based u/s 13(3) of IGST, default Provision 13(2) applies Conditionally: CBIC [Read Circular]

The CBIC has clarified that advertising services provided to foreign clients will not be classified as performance-based under Section 133 of the IGST Act. Instead, these services are subject to Section 132, which deals with services not specifically covered by the IGST Act. The distinction is important because performance-based services have different tax implications, and this clarification helps advertising companies avoid unnecessary tax complications. This guidance aims to simplify tax compliance for firms that provide cross-border services.