Insights · Touring Economy Tax
GST Reverse Charge on Foreign Artist Fees for Events in India
Why an Indian promoter pays 18% IGST on a foreign artist's fee, when the liability arises on advances, and how the credit is recovered against ticket sales.
When an Indian promoter pays a foreign artist or a foreign management company for a show held in India, the promoter must pay 18% IGST on the fee under the reverse charge mechanism. The foreign party does not register or charge GST. The tax is paid in cash by the promoter and is generally available as input tax credit against GST collected on tickets and sponsorship.
Key points
- The fee is an import of services taxed under section 5(3) of the IGST Act and Notification 10/2017-Integrated Tax (Rate)
- Place of supply for an event is where the event is held, under section 13(5) of the IGST Act
- Rate: 18% IGST, paid through the cash ledger, not by using credit
- Time of supply: date of payment, or the 61st day from the invoice date, whichever is earlier
- This is in addition to income tax withheld on the same fee
Why reverse charge applies
A supply is an import of services when the supplier is outside India, the recipient is in India and the place of supply is in India. For services connected with an artistic or entertainment event, the place of supply is the place where the event is actually held. A concert in Mumbai or Delhi therefore has its place of supply in India, whatever the artist’s contract says about governing law or invoicing location.
Entry 1 of Notification 10/2017-Integrated Tax (Rate) makes the Indian recipient liable for tax on any service supplied by a person in a non-taxable territory. It does not matter whether the payee is the artist personally, a loan-out company, a booking agency or an overseas production company.
What value the tax applies to
IGST applies to the full consideration for the supply. Where the promoter has agreed to bear Indian income tax on a net-of-tax contract, the grossed-up fee is the consideration, and GST should be computed on that figure. Costs that the promoter contracts and pays for directly, such as local hotels or a production vendor in India, are separate domestic supplies on which the vendor charges GST in the normal way. Amounts reimbursed to the foreign party form part of the value of its supply unless the strict pure-agent conditions are met.
When the tax is due
For an unrelated foreign supplier, the time of supply under reverse charge is the earlier of the date of payment and the date immediately following 60 days from the supplier’s invoice. Artist contracts typically require a deposit on signing and the balance before the show, so reverse charge is triggered on each instalment as it is paid. Where the foreign supplier is an associated enterprise, the time of supply is the earlier of the entry in the recipient’s books and the payment, which can bring the liability forward.
The promoter raises a self-invoice, reports the supply in GSTR-3B for the month and pays the IGST in cash. Reverse charge liability cannot be set off against existing credit.
Input tax credit
IGST paid under reverse charge is eligible input tax credit for a promoter making taxable supplies, which covers ticket sales, sponsorship and broadcast or brand deals. Admission to a commercial concert is generally taxed at 18%, so most promoters are fully taxable and recover the credit in the same or the following month. Three conditions matter in practice:
- the credit arises only after the tax is actually paid in cash
- a self-invoice and payment voucher must be on record
- if the event produces exempt or non-business use, a proportionate reversal is required
For a taxable promoter the tax is therefore mainly a cash-flow cost. It becomes a real cost where the show is cancelled, the promoter has no output tax to absorb the credit, or the liability was never reported and is later demanded with interest.
How it sits alongside income tax withholding
| Income tax (TDS) | GST (reverse charge) | |
|---|---|---|
| Rate | 20% plus surcharge and cess for individual entertainers; 35% plus surcharge and cess for foreign companies | 18% IGST |
| Who bears it | The artist, unless the contract is net of tax | The promoter, recoverable as credit |
| Trigger | Earlier of credit or payment | Earlier of payment or 61st day from invoice |
| Return | Quarterly non-resident TDS statement | GSTR-3B for the month |
The income tax side is covered in TDS on payments to foreign artists performing in India.
Common errors we see in event accounts
- Reverse charge not booked on advances paid months before the event
- Foreign artist fees recorded net of tax, understating both TDS and GST
- Credit claimed in the books without the cash payment having been made
- Ticketing platform settlements treated as revenue without reconciling them to the sales report on which output GST is due
Interest on unpaid reverse charge runs at 18% a year from the due date, and the department routinely matches foreign remittance data with GSTR-3B. Our GST team reviews event ledgers for these gaps before the annual return is filed.