Service Tax on Hoarding & Advertising in News Paper

[AMIT JAIN, Advocate]

Dear Friends, Myself Amit Jain, Adv. My query :-

 Is service tax applicable on Hoarding & Advertising in News Paper?

because some expert says that 'Service Tax on Hoarding & Advertising in News Paper' is withrawn from lat 1 month. please solve my query and guide me as soon as possible.

 

 

[CASeetharaman KC]

The issue  raised by you is covered under Section 66D(g) of the Finance Act , 1994 which covers the Negative List and more specifically the "Selling of space or time slots for advertisements other than advertisements broadcast by radio or television". The items which are not taxable as a result of their inclusion in the negative list are as per tabulation given below:

Taxable	Non-taxable
Sale of space or time for advertisement to be broadcast on radio or television	Sale of space for advertisement in print media
Sale of time slot by a broadcasting organization.	Sale of space for advertisement in bill boards, public places (including stadia), buildings, conveyances, cell phones, automated teller machines, internet
	Aerial advertising

However, Services provided by advertisement agencies relating to making or preparation of advertisements would be covered in this entry and would thus be taxable. This would also cover commissions received by advertisement agencies from the broadcasting or publishing companies for facilitating business, which may also include some portion for the preparation of advertisement.

You would therefore have to ascertain what kind of  service is being provided and by whom? It the service is provided by an Advertisemnt Agency for preparation/designing of  Advertisement in Newspapers then it would be taxable. What is included in the Negative List is the Sale of  Space in Newspapers which is normally done by the Print Media only and also Sale of space for advertisement in billboards, public places, buildings, conveyances, cell phones, automated teller machines, internet. Please note that selling of space for doing such advertisements are excluded and covered in the Negative List and this exemption is available only for the person selling the space for the Advertisement in Hoardings and other areas as specified. Services rendered by Advertisemnt Agencies for preparation , designing of such Hoardings are subject to service tax as they are not included in the Negative List.

[nilesh khatate]

Dear Amit sir,

I have a client whose business is to distribute money on behalf of a one telephonic/ mobile  commnication company, to Ganesh mandals and solicit them to advertise the company's product in the mandaps of ganesh mandals during ganapati festivals.

the required banners, flex and other material for advertising is provided by the company itself. the client only solicits mandals to display company's advt in public place i.e. ganesh mandals mandap and lanes. in return he charges company as service charges @10% . and levies service tax on entire amount i.e amount (reimbursed) i.e paid to ganesh mandals plus his service charges

whether his service (above referred) is covered in negative list selling of space for advertisement and should be not levy tax henceforth. if he has to levy service tax then on which amount.

 

kindly reply early, thanking you in anticipation

AI Summary

Sale of advertising space exclusion protects publishers and hoarding owners from service tax while ad agency creative services remain taxable. Section 66D(g) excludes from service tax the sale of space or time for advertisements (other than radio/television), covering print media and hoardings and related locations; this exclusion applies to the person selling the space. Conversely, services by advertisement agencies for making, preparing or designing advertisements and commissions for facilitating placement are not excluded and are taxable. One must determine who provides the service: pure sale of space is non taxable, agency creative/preparatory services and facilitation commissions are taxable, and intermediaries have in practice treated reimbursements plus service charges as taxable receipts.