We having a advertisement agency and it was registered with Service Tax Department. Basically we are provide to our client designing and graphic part of advertisement as a creative charges and we are raised them the bill with Service Tax 12.36.
Some time some client are request us to releasing their advertisement into the newspaper and according to their request we book space on the newspaper. Newspaper agencies raised us bill for space booking and we made them payment. We pass the entry in our book as given below –
Advertisment Exp A/c Dr.
News Paper Agencies A/c Cr.
Due to space booking on News Paper we raised the bill to our Client, as there is no creativity we are not adding any Service Tax on the Bill and we pass the entry in our book as given below –
Client A/c Dr.
Advertisement Exp A/c Cr.
After both the entries the Advertisement Exp A/c become nill. Now my question to you, please advise me, this is a right procedure. Or I have to maintain some other way? What is the impact of Service Tax on releasing advertisement. Please guide me.