TaxTMI 
TaxTMI 
2020 (3) TMI 293
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.... whether said pure service is exempted from payment of GST vide Notification No. 12/2017-Central Tax (Rate), dated 28^th June, 2017 when advertising agency is raising bill to Local Authority or otherwise; and (d) if exemption is available to local authority then said exemption is also available to advertising companies or not. 2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 3. As per the said sub-section (2) of Section 97 of the CGST/SGST Act, 2017 advance ruling can be sought by an applicant in respect of : (a) Classification of any goods or services or both, (b) Applicability of a notification issued under the provisions of this Act, (c) Determination of time and value of supply of goods or services or both, (d) Admissibility of input tax credit of tax paid or deemed to have been paid, (e) ....
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....nvolving any supply of goods would be treated as supply of pure services. On the other hand, let us take the example of a Governmental authority awarding the work of maintenance of street lights in a Municipal area to an agency which involves apart from maintenance, replacement of defunct lights and other spares. In this case, the scope of the service involves maintenance work and supply of goods, which falls under the works contract services. The exemption is provided to services involves only supply of services and not for works contract services. In the case of '"Sale of space for advertisement in print media" it includes sale of space on print media which forms material component of this supply. Material in the form of Newspaper is supplied for the unit space booked by the client. Based on the definition of Pure Service and considering the above fact "Sale of space for advertisement in print media/' cannot be considered as Pure Service. (iii) Further Notification No. 12/2017 has exempted "Pure Services" (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union terri....
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....te if advertising company/agency sells unit of space in print media to client and designing/composing is being done by advertising company/ agency without charging separately in the bill for designing, etc., to client. (B.1) In this context, we find that there are two slabs of GST rate prescribed, in respect of supply in question, at Entry No. 21 under Heading 9983 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as under : Entry No. Chapter, Section or Heading S. No. Description of service GST rate 21 9983 i Selling of space/time for advertisement in print media. 5% ii Other professional, technical and business services other than (i) above 18% (B.2) On perusal of said notification, we find that selling of space for advertisements in print media and other related services would attract 5 and 18 per cent. GST respectively, depending on the terms of the contract between the newspaper, advertisement agency and the client. A few cases in this regard [are] discussed below : (a) In a case where advertisement agency works on principal to principal basis means....
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....rally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; (ii) Section 2(90) of the Act, ibid "principal supply" means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; [(iii)] Section 8 of the Act, ibid : The tax liability on a composite or a mixed supply shall be determined in the following manner, namely :- (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b)_________________ (B.4) In this situation we observe that there is involvement of two supply of services (i) selling of space in print media and (ii) designing/composing of the advertisement. Accordingly the same falls under the definition of "composite supply" inasmuch as two taxable supplies of services are naturally bundled and supplied in conjunction with each other in the ordinary course of business. Now the question arises which one of them is a principal....
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....to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Nil Nil (C.2) On perusal of aforesaid notification, we find that services supplied without involving of goods is a pure service and to avail exemption under said notification following conditions are required to be fulfiled : (i) pure service must be supplied to the Central Government, State Government or Union territory or local authority or a Governmental authority and (ii) supply of pure service is related to an activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution. (C.3) On perusal of record we find that applicant argued that "sale of space for advertisement in print media" includes invariably includes supply of material in the form of newspaper and the material component forms a major part of the value of said supply. Thus said supply does not fall in the category of "Pure Services". (C.4) We find that in terms of Se....