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Service tax on advertising service

This query is : Resolved 

24 April 2013 If an Ad Agency received Rs. 90 only from clients for an advertisement costing Rs. 100/- in print media, & pays Rs. 85 to Print Media. than ST payable by Ad agency on Rs. 5 recd. from client or on Rs. 15 i.e. (100-85)

25 April 2013 Service tax is payable on Rs. 5

25 April 2013 But Sir Service Tax Department is taking stand that since your commission from media is Rs. 15, You are liable for service tax on Rs. 15

please reply

19 May 2013 You have to argue your case that you have allowed Rs. 10/- as discount and service tax is payable on the difference between the price charged and price paid. It is not on gross basis. The tax payable is on accrual basis.


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