Service tax applicability for advertising agency
This query is : Resolved
05 April 2017
Dear sir,
My Client Engaged in the activity of Advertising Agency for Print Media and Television, he collects services tax @2.25%(i.e on 15% discount he obtained from Print Media) for Print media and 15% for News channels bills, now we want to pay service tax under which head we have to pay service tax weather it is under advertising Agency service or Selling of Space or time slot for Advertisements ????.
My Client Engaged in the activity of Advertising Agency for Print Media and Television, he collects services tax @2.25%(i.e on 15% discount he obtained from Print Media) for Print media and 15% for News channels bills, now we want to pay service tax under which head we have to pay service tax weather it is under advertising Agency service or Selling of Space or time slot for Advertisements ????.
06 April 2017
Service tax has to be paid under advertising agency
22 April 2017
Thanks for your reply madem, Which option we have to select while uploading service tax return 1.gst userid 2.not migrating we did not receive gst provisional ID and password we just registered in the month of March 2017.
24 July 2025
Here’s a clear explanation for your query on service tax applicability for advertising agencies (pre-GST regime):
Service Tax Applicability for Advertising Agencies
Nature of Service:
Advertising agencies provide services of “Advertising Agency Service” as defined under the Finance Act, 1994.
This service involves placing advertisements on behalf of clients in print media, television, radio, internet, etc.
Taxable Value & Rate:
Service tax is payable on the gross amount charged by the agency to the client, which includes any discount or commission obtained from the media houses.
Usually, service tax was charged @ 15% (later 14% + cess = approx 15%) on the gross amount, which often includes the commission or discount retained by the agency.
The 2.25% you mention on 15% discount from print media might refer to a component of the effective tax after abatement, but service tax was ultimately under Advertising Agency Service.
Head under which Service Tax is paid:
The correct service tax category is “Advertising Agency Service” under SAC code 9983.
You do not pay service tax under “Selling of Space” or “Time Slot” separately because the agency is providing a service of advertising placement, not the actual sale of advertising space.
While filing Service Tax Returns (ST-3):
Select Advertising Agency Service as the taxable service.
Report the gross amount billed to your clients.
Report the service tax collected accordingly.
Regarding GST migration (March 2017 context):
Since GST launched from 1 July 2017, if you registered in March 2017 and did not receive GST provisional ID and password, you would have filed the last service tax returns as usual till June 2017.
On GST portal, you should have chosen the “Migrating taxpayer” option only if you received GST provisional credentials.
Otherwise, you continue with service tax compliance till 30 June 2017 and switch to GST from 1 July 2017.
Service Tax Applicability for Advertising Agencies
Nature of Service:
Advertising agencies provide services of “Advertising Agency Service” as defined under the Finance Act, 1994.
This service involves placing advertisements on behalf of clients in print media, television, radio, internet, etc.
Taxable Value & Rate:
Service tax is payable on the gross amount charged by the agency to the client, which includes any discount or commission obtained from the media houses.
Usually, service tax was charged @ 15% (later 14% + cess = approx 15%) on the gross amount, which often includes the commission or discount retained by the agency.
The 2.25% you mention on 15% discount from print media might refer to a component of the effective tax after abatement, but service tax was ultimately under Advertising Agency Service.
Head under which Service Tax is paid:
The correct service tax category is “Advertising Agency Service” under SAC code 9983.
You do not pay service tax under “Selling of Space” or “Time Slot” separately because the agency is providing a service of advertising placement, not the actual sale of advertising space.
While filing Service Tax Returns (ST-3):
Select Advertising Agency Service as the taxable service.
Report the gross amount billed to your clients.
Report the service tax collected accordingly.
Regarding GST migration (March 2017 context):
Since GST launched from 1 July 2017, if you registered in March 2017 and did not receive GST provisional ID and password, you would have filed the last service tax returns as usual till June 2017.
On GST portal, you should have chosen the “Migrating taxpayer” option only if you received GST provisional credentials.
Otherwise, you continue with service tax compliance till 30 June 2017 and switch to GST from 1 July 2017.
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