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Q. > Please Help: Advertising Agency Service
I want to clarify my issue on advertisement agency service. My client raises Rs.100.00 bill to customer and pass on Rs.85.00 to print media company who actually print matter in newspaper. My client earn 15% in this kind of transaction or we can say this is his commission. For calculation of service tax we charge 12.36% on Rs.15 or 1.854% on Rs.100.00 (both are same). Now my issue is for calculation of small scale exemption of Rs.10.00 lacs what value shall be taken Rs.100.00 or Rs.15.00??? If we take Rs.100.00 then limit of 10 lacs will be lapsed soon and vice versa. Department is contending that tax should be levied @1.854% on rs.100 and limit of 10 lac to be calculated by taking Rs.100.00 but i think it should be calculated by taking Rs.15.00. Is the contention of department correct?? if not please suggest me some notifications or circulars to oppose their point.
Experts Panelist
Comments
Manish Kr.
10-Jul-2014 , 10:40:02 amThe question is whether the expenses incurred on the terms of advertising agency will be added in the value of service. Expenses incurred as pure agent shall not be added in the value of service for the purpose of assessable value of service. Rule 5(2) clause (v) of Service Tax (Determination of Value) Rules, 2006. Accordingly only the commission amount will be deemed amount of services rendered for the purpose of claiming SSI exemption.