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Tds and service tax on advertisement contract

Rupesh (Student) (43 Points)

12 February 2015

Dear Friend

Please do tell me whether service tax and TDS is applicable on Paymenty for Advertising(as there is a contarct for advertising through hoarding.If yes How will accounting entries be made?

regards

Rupesh Kumar

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3 Replies

Vikas (CA) (1135 Points)
Replied 20 February 2015

Hi Rupesh,

There is no abatement specific exemption provided to the advertising services. Thus, the Service tax would be charged @ 12.36% on the value of services.

Since, you have to only pass the accounting entry, then you will have provide for TDS (I believe it is 1% / 2% depending upon the status of the payee - refer to Section 194C of the Income Tax Act, 1961).

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 03 March 2015

Hello,

Service tax will be charged on Sale of space or time for advertisements in broadcast media, namely radio or television. w.e.f 01-oct-2014 The new levy would further extend to advertisements in internet websites, out-of-home media, on film screen in theatres, bill boards, conveyances, buildings, cell phones, Automated Teller Machines, tickets, commercial publications, aerial advertising,etc. Sale of space for advertisements in print media however would remain excluded from Service tax.