GST for providing advertising space in printed media

[Antony Kaitharath]

Sir,

We a catholic church have GST registration. In connection with a religious event of church a committee of faithful was formed and they published a printed supplement. To generate revenue for the event advertising space were was provided in the supplement based on a tariff fixed by the committee. It may please be clarified whether the revenue for advertisement attract GST. The whole revenue was collected and utilised by the Committee. The church earned no revenue from it.

Thanks in advance

Antony Kaitharath

[KASTURI SETHI]

Such activity is taxable under HSN 998363 GST @5% is applicable. See serial no.21 of Notification No.11/17-CT(Rate) dated 28.6.17 (as amended from time to time up to 30.9.19) It is a commercial activity. Any temple or church is always administered by Trust/Managing Committee. Church is fully responsible for discharging tax liability. Only religious ceremonies are exempted. The Committee does not exist without Church and Church cannot be run without any management or Trust or Committee (whatever you may say). Both are integrated. You cannot take shelter of the plea that church has earned no revenue. You may go through the following information :

GST - Selling of Space for advertisement in print media

C.B.E. & C. Press Release No. 92/2017, dated 23-8-2017

Government of India

Ministry of Finance (Department of Revenue)

Central Board of Excise & Customs, New Delhi

Query has been raised before this Ministry regarding GST applicable on selling of space for advertisement in print media.

2. Selling of space for advertisement in print media is leviable to GST @ 5%. If the advertisement agency works on principal to principal basis, that is, buys space from the newspaper and sells such space for advertisement to clients on its own account, that is, as a principal, it would be liable to pay GST @ 5% on the full amount charged by advertisement agency from the client.

Illustration : If newspaper sells a unit of space worth ₹ 100/- to advertisement agency for ₹ 85/- [after a trade discount of ₹ 15/-], the advertisement agency sells the same unit of space to client at ₹ 100/-, newspaper would be liable to pay GST @ 5% on ₹ 85/- [=₹ 4.25/-], and the advertisement agency would be liable to pay GST on full value, that is, ₹ 100 [=₹ 5/-] and may utilise ITC of ₹ 4.25/- for payment of the same.

3. On the other hand, if the advertisement agency sells space for advertisement as an agent of the newspaper on commission basis, it would be liable to pay GST @ 18% on the sale commission it receives from the Newspaper. ITC of GST paid on such sale commission would be available to Newspaper.

Illustration : Advertisement agency sells unit of space to the client not on its own account but on account of newspaper for ₹ 100/- and receives commission of ₹ 15/- for such sale from the Newspaper. In such a case, advertisement agency shall be liable to pay GST @ 18% on the sales commission of ₹ 15/- [=₹ 2.7/-], ITC of which shall be available to newspaper for payment of GST @ 5% on ₹ 100/- [value of space for advertisement sold by the newspaper]

4. However, if the advertisement agency supplies any service other than selling of space for advertisement, such as designing or drafting the advertisement, and such supply is not a part of any composite supply, the same would be liable to tax @ 18%. If such supplies are part of any composite supply, the rate applicable for the principal supply shall apply.

5. Therefore, everything depends on the terms of the contract between the newspaper, advertisement agency and the client.

[Antony Kaitharath]

Much helpful informatrion. Thanks a lot

Antony Kaitharath

AI Summary

Church's Ad Revenue from Religious Event Taxed at 5% GST Under HSN 998363, Per Notification No.11/17-CT(Rate) A Catholic church, registered for GST, organized a religious event and published a printed supplement to raise funds by selling advertising space. A query was raised regarding the applicability of GST on the revenue from these advertisements. It was clarified that such activities are taxable under HSN 998363 at a 5% GST rate, as per Notification No.11/17-CT(Rate). The church is responsible for the tax liability, despite not directly earning revenue. The discussion referenced a government clarification on GST for selling advertisement space, emphasizing the tax implications based on the nature of the agency's role and contract terms.