Pure agent

[Sohail Ahmed]

Sir,

Say A is registered as advertising agency. He procure orders for advertisment and get it done in print and electronic media. He get 15% discount on such orders. He issue invoices of same value and pays service tax only on 15% discount. My question is

1. In which category of services does he fall.

2. Can he avail cenvat credit of service tax he pays on bills he receives.

AI Summary

Advertising Agency's 15% Commission Taxed Under Business Support Services, CENVAT Credit Eligibility Debated Under Finance Act, 1994. A discussion on a forum revolves around the classification and tax implications for an advertising agency, referred to as A, which receives a 15% commission on advertising orders. A queries whether this activity falls under a specific service category and if CENVAT credit on service tax paid is applicable. Respondents suggest that the commission is taxable under Business Support Services (BAS) as per the Finance Act, 1994, and that input services necessary for providing such services are eligible for CENVAT credit. However, there is debate over the correct classification and the availability of CENVAT credit.