SERVICE TAX ON LISENCE FEE RECEIVED BY THE MUNICIPAL CORTAION

[suhas phadke]

WHETHER SERVICE TAX IS APPLICABLE ON LISENCE FEE RECEIVED BY THE MUNICIPAL CORPORATION ( LOCAL GOVERMENT BODY) FOR ALLOWING ADVERTISING AGENCY TO PUT HIS KIOSK BOARD ? KEEP IN MIND FOLLOWING POINTS : AS U ALL AWARE THAT SERVICE TAX IS VALUE ADDED TAX AND WHEN CORPORATION RECEIVED LISENCE FEE THEN THERE IS NO VALUE ADDITION. SECONDLY CORPORTION DOES NOT CREAT A SPACE FOR ADVERTISEMTN. THE SPACE IS BEING CREATED BY THE ADVERTISING AGENCY. IF ANY BODY HAVE CASE LAW IN THIS MATTER. PL LET US KNOW. SUHAS PHADKE BARODA

[Brijesh Verma]

Dear Mr. Suhas,

The License fee received by the Municipal Corp. is definitely not classifiable as advertising service as rightly pointed out by you, but I am afraid, the same gets covered under the 'Selling of Space & Time for Advertisement' category. Please check...!!!

AI Summary

Debate on Service Tax Applicability for Municipal License Fees on Advertising Spaces Under 'Selling of Space & Time' Rule. A discussion was initiated regarding the applicability of service tax on license fees received by a municipal corporation from an advertising agency for allowing kiosk board placements. The query highlighted that service tax is a value-added tax and questioned its applicability since the corporation does not create advertising space; it is created by the agency. A respondent clarified that while the fee is not classified as an advertising service, it might fall under the category of 'Selling of Space & Time for Advertisement.'