Services Tax for Advertisement agencies

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This query is : Resolved

Vijay Sakhare (Querist)

08 July 2009 Dear Sir,
advertisement agencies services tax deducted for normal margin 15%. for given publication.

But one agencies services deducted after discount for costumer. for example :

Bill Amount Rs. 10000
Discount 7% 700
After Dis. 9300
Margin 15% 1395
Services Tax 8% 111.6

(Marging 15% Less 7% discount Balance Margin 8%)
This is posible. plz ans. me.

thanx

Vijay Sakhare
9975796219

ADITYA

ADITYA (Expert)

10 July 2009 Dear Sakhare,

Please note that Service Tax liability is always on receipt Basis.It is payable on The Gross Receipt which includes your profit / Margin also.
AS asked by you after providing discount, if you raise a bill of Rs 9,300/= + Service Tax (10.30%)958/= comes to Rs10258/= & receives the same amount i.e. Rs 10,258/= from your Customer. You will be liable to Pay ST of Rs 958/=.
However, if your customer pays you lesser amount (whatsoever reason), your liability of ST will be proportionately reduced.

The ST Liability is always on the ACTUAL RECEIPT BASIS & NOT on Billing Basis.

Hope matter is clear.

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