Gst on newspaper advertising agency

dear experts

plz reply

Advartising agency considdred as Pure Agent. They will not be billing additional charges against the total gross amount(face value as per publications). If this is applicable then they will be legible for 5% GST rate as the Publications will be paying the 85% of the Gross amount and the agency will be legible to pay the 15% of the Gross Amount tax.

E.g. Publications will be billing 100/- for the agency behalf of its client. In 100/- 15% i.e. 15/- will be the agency commission/discount affiliated to the agency so the 5% GST is applicable on 85/-. The agency should bill on 100/- under 5% GST as they have already paid GST for 85/- on behalf of client.

The same format was applicable in Sevice Tax where the agency were paying only on 15% of the gross amount (which is the commission amount).

Mr. Becool, Agency is a service provider and secondly client will any how pay the same amount even if it's agency or publication but publication who prepare the layout of the advertising material.
When Publication bills Agency they bill on 85/- as 15% discount/commission is liable for agency and GST of 5% is applicable only on 85% but if additional discount is shown apart from 15% let's say another 5% then GST is applicable on payable amount. Now as the Agency has already paid the GST on 85/- on behalf of its client so Agency is liable to take that amount also in this term Agency will bill 100/- and GST is applicable on 100/- and the difference amount of GST (collected from client less already paid to publication) is payable to the government by the Agency. This practice is called Pure Agent.

If agency doesn't get any discount from publication not even 1 rupee but charges additional rupees (E.g. property agents) and merely depends on commission by charging 145/- where 40/- is his commission and 105/- is the Total bill of publication
in which 5/- is tax and 100/- is the Total bill of publication (without any discount but this practice isn't available in print or electronic media) the Agency has to bill 18% GST only on 40/-

agency also charged gst on net value
if newspaper charge 85 net+gst 5% on 100 gross
and agency charge 100 +gst

Mr.Vishal as agency will be paying the 5% GST on 85% of the value on behalf of his client and will be entitled to collect and pay the 15% of the value from client. So the agency has the authority to tax on 100% value to collect the same tax amount of 85% of the value.

sir
agency is space seller in gst
not agent

Mr. Vishal, advertising agency who fall under Pure Agent as per tax descripttion should tax as per the service provider or else the agency will fall under financial losses. If the agency is entitled to tax 18% on 15% his gain then the publication has to tax 18% on the 85% of their gain. Do the calculation and match the total tax on 100% value in both ways i.e.
1) 85% value with 5% and 15% value with 5%
2) 85% value with 5% and 15% value with 18%
the difference between tax paid and tax collected by the agency differs and the Notice/Order will be sent.

agreed

thanks

Just to elaborate...

Under 5% regime

For Pure Agency Publication Bill   Agency Bill   difference Net Amt.       5,000.00   Net Amt.    5,000.00   85% Value 15% Value Total 15% Discount          750.00   Taxable Amt.    5,000.00       4,250.00         750.00    5,000.00 Taxable Amt.       4,250.00   CGST 2.5%       125.00           106.25           18.75       125.00 CGST 2.5%          106.25   SGST 2.5%       125.00           106.25           18.75       125.00 SGST 2.5%          106.25   Round off                 -             212.50           37.50       250.00 Round off               0.50   Payable    5,250.00       4,462.50         787.50    5,250.00 Payable       4,463.00

Here the agency can receive the exact amount of the Tax which was paid on behalf of the Client to the publication and the total taxation wont be hampered. 

Under 18% regime

Publication Bill   Agency Bill   difference Net Amt.       5,000.00   Net Amt.    5,000.00   85% Value 15% Value Total 15% Discount          750.00   Taxable Amt.       750.00       4,250.00         750.00    5,000.00 Taxable Amt.       4,250.00   CGST 2.5%          67.50           106.25           67.50       173.75 CGST 2.5%          106.25   SGST 2.5%          67.50           106.25           67.50       173.75 SGST 2.5%          106.25   Round off                 -             212.50         135.00       347.50 Round off               0.50   Payable    5,135.00       4,462.50         885.00    5,347.50 Payable       4,463.00

Under 18% the agency cannot gain the same tax amount which they have paid behalf of its client and they aren't entitled to tax 18% on full amount.

 

The 18% regime is only applicatble for Ad Agency which falls under Pure Agent if the publication issues the same GST percentage.

Agencies who are actually paying 100% tax to the publications/media and billing additional charges for the client are entitled for 18%. For e.g. Agents who are into real estate are

nope...

newspaper bill
100-15%=85×5%

agency bill
100×5%
need to recover the tax paid to publication on Rs. 85 and collect the tax of Rs. 15 to pay to the govt.