16 December 2010
Mr.A started his business 01/04/2010(Advertising Agency(Sub) Sales Bill Amount Rs. 10,000 + 103 (Rs.10,000 x 10% Commission) = Rs10,103.00 Client Bill Amount Rs. 10,103.00 & Mr.A send this Advertisement Newspaper, Press Bill Amount Rs. 9,000.00 Mr.A income only Rs. 1000 & collect service Tax Rs. 103 to his client. (1000 x 10.30% service Tax = Rs. 103) This is Correct Method. Mr. A only received Commission Rs. 1000 through Press.
Mr. A claim CENVAT. Mr.A send advertise to Mr.B(Sub-Agency) Mr.B Sales Bill Rs.9000+Rs.93 = Rs.9093 so, Service tax paid Rs.103-Rs.93 = Rs.10
so, Mr.A claim Rs.93 as a CENVAT, If you no Please guide me
Service Tax for the value of service provided for consideration. In case of advertising business, the agency is an mediator between the client and Main advertiser(like Hindu News paper). The main advertiser will give commission to the mediator(agency). It means agency providing service to the main advertiser hence the benefit to agency is restricted to his commission accordingly service tax to be charged on the commission. This view was accepted by the department.
CAclubindia
