gst advertising agency

f the advertising agency buys space from a media house and sells it further to its client, keeping a margin for itself, that margin is taxed at 5%, the same rate at which the value of the space sold is taxed. The advertisement agency could claim credit for the GST paid at the time buying print space from the news organisation and set off part of the GST liability on the sale against it.

However, if the ad agency renders its service to the media house as an agent for a commission, its commission is taxed at 18%, and the tax paid by the agency could be claimed as credit by the media organisation for paying the 5% GST liability on the entire value of the space sold, the ministry explained with the help of illustrations.

If the advertisement agency supplies any service other than selling of space for advertisement, such as designing or drafting the advertisement, and such supply is not a part of any composite supply, the same would be liable to tax at 18%, said the ministry.