Taxable value in advertising services and stay relief turned on retained write-backs and factual parity for volume discounts.

At the stay stage, amounts retained by an advertising agency as write-backs were treated prima facie as part of the taxable consideration, and the Board circular supporting tax on the gross amount less payments to media weighed against full waiver; pre-deposit of 25% of the confirmed demand was directed for that component. For the separate demand relating to volume discounts received from media, factual parity with an earlier Tribunal order and the assessee's inability to choose the advertiser supported complete waiver of pre-deposit. The stay application was thus allowed in part, with partial relief confined to the write-backs demand and full waiver granted for the volume-discount demand.

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Issues: (i) Whether the amount retained by the advertising agency as write-backs formed part of the taxable value for service tax purposes and justified denial of full waiver of pre-deposit. (ii) Whether the demand raised on volume discounts received from media warranted pre-deposit or complete waiver at the stay stage.

Issue (i): Whether the amount retained by the advertising agency as write-backs formed part of the taxable value for service tax purposes and justified denial of full waiver of pre-deposit.

Analysis: The amount collected from the client and not paid over to the media was, on a prima facie view, treated as part of the consideration retained by the assessee. The Board's circular relied upon by the Revenue also supported computation of service tax on the gross amount charged less the amount paid to the media. On that basis, the assessee was not found to have made out a case for full waiver.

Conclusion: The demand relating to write-backs was not granted complete waiver, and pre-deposit of 25% of the confirmed amount was directed.

Issue (ii): Whether the demand raised on volume discounts received from media warranted pre-deposit or complete waiver at the stay stage.

Analysis: The assessee showed that the factual position was similar to an earlier Tribunal order where unconditional waiver had been granted. The inability of the assessee to choose the advertiser was treated as a material feature supporting parity with that earlier view.

Conclusion: Complete waiver of pre-deposit was granted in respect of the demand on volume discounts.

Final Conclusion: The stay application was disposed of by granting only partial relief, with pre-deposit confined to the write-backs demand and full waiver allowed for the volume-discount demand.

Ratio Decidendi: At the stay stage, amounts retained by an advertising agency over and above the payment made to media may be treated prima facie as part of the taxable consideration, while comparable factual parity with an earlier waiver order can justify complete waiver for a separate demand.

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