# RCM on Sponsorship Services

## Coverage

Sponsorship services provided by any person other than a body corporate → to a Partnership Firm OR Body Corporate located in taxable territory → RCM applies, recipient pays.

## Who is in / out?

Supplier	Recipient	Mechanism
Any person other than a body corporate (individual, firm, AOP, etc.)	Partnership firm OR body corporate	RCM — recipient pays
Body corporate (company)	Partnership firm OR body corporate	FCM — supplier pays
Any	Any other recipient (e.g., individual, HUF)	FCM — supplier pays

## Two-condition test

1. Supplier ≠ body corporate, AND

2. Recipient = partnership firm or body corporate in taxable territory.

Both must be true for RCM to trigger.

Worked example

### Example 1

Q. RSA Firm (partnership) provides sponsorship services to XYZ Ltd. for ₹2 lakh. Who pays GST?

A. Supplier is not a body corporate (RSA is a partnership firm) and recipient (XYZ Ltd.) is a body corporate → RCM applies. XYZ Ltd. pays GST directly to the Government.

### Example 2

Q. ABC Ltd. provides sponsorship services to XYZ Ltd. for ₹2 lakh. Who pays GST?

A. Supplier ABC Ltd. is a body corporate → first condition fails → FCM applies. ABC Ltd. charges GST on the invoice and pays it.

⚠️ Common exam mistakes

Applying RCM whenever the recipient is a company — RCM requires that the supplier is not a body corporate.
Applying RCM where the recipient is an individual or HUF — only partnership firm/body corporate recipients trigger RCM.
Forgetting that sponsorship of sports events organised by listed sports bodies is exempt (covered under exemption entry) — exemption analysis comes before RCM.

Reference: — Notification No. 13/2017-CT(R)

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RCM — Sponsorship Services

Worked example

⚠️ Common exam mistakes