Print Media

[Guest]

Service tax on print media was in negative list in the year 2014-15....but now a query had been raised that as an advertising agency you were required to pay ST. What's the real part

[Rajagopalan Ranganathan]

Sir,

According to para 4 of F. No. 341/43/96-TRU, dated 31-10-1996 in relation to advertising agency, the service tax is to be computed on the gross amount charged by the advertising agency from the client for services in relation to advertisements. This would, no doubt, include the gross amount charged by the agency from the client for making or preparing the advertisement material, irrespective of the fact that the advertising agency directly undertakes the making or preparation of advertisement or gets it done through another person. However, the amount paid, excluding their own commission, by the advertising agency for space and time in getting the advertisement published in the print media (i.e. Newspapers, periodicals etc.) or the electronic media (Doordarshan, private TV Channels, AIR etc.) will not be includible in the value of taxable service for the purpose of levy of serviced tax. The commission received by the advertising agency would, however, be includible in the value of taxable service.

Please eloborate the nature of the query raised.

[KASTURI SETHI]

As per Education Guide NOT TAXABLE.

4.7.1 Sale of space of time for advertisements not including sale of space for advertisement in print media and sale of time by a broadcasting agency or organization is currently taxed under sub-clause (zzzm) of clause (105) of Section 65 of the Finance Act, 1994, So what kind of sale of space or time would become taxable and what would be not taxable?

Non-taxable

(1) Sale of space for advertisement in print media

(2) Sale of space for advertisement in bill boards, public places (including stadia), buildings, conveyances, cell phones, automated teller machines, internet

(3) Aerial advertising

[KASTURI SETHI]

I think the querist could not understand the actual problem. If it is the issue of commission as opined by Sh.Ranganathan Sir, it would fall under the category of BAS and would be taxable. Full details are required for correct reply.

AI Summary

Service tax on advertising agencies applies to gross fees and commissions, excluding payments for media space or time. Service tax on advertising agencies is computed on the gross amount charged to clients for advertisement services, including fees for creating advertisement material, while amounts paid by the agency for media space or time are excluded from the taxable value; however, agency commission and similar fees are includible and taxable. Sale of space in print media is non-taxable, whereas sale of broadcasting time is taxable, so classification of each revenue item is determinative of tax liability.