Query has been raised regarding GST applicable on selling of space for
advertisement in print media. Selling of space for advertisement in print media
is liveable 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.
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.
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.
Therefore, everything depends on the terms of the contract between the
newspaper, advertisement agency and the client.
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