Positive confirmation of GST treatment under a sponsorship agreement

OSH recently advised on the GST treatment for a sponsorship agreement. Under the sponsorship agreement, the sponsor agreed to provide a car to the winner of a draw to be carried out at malls managed by the client. The issue was whether the client had to account for GST under the sponsorship agreement.

We took the view contrary to long-standing industry practice and previous tax advice received by client that any advertising of sponsored prizes constitutes a supply in return for the prizes. OSH made submissions to the Comptroller and was successful in persuading the Comptroller that there was in fact no supply made by the client under the sponsorship agreement. Thus, the client was not liable to account for GST.