Gst rate of advertising agency

GST rate is 18% with full ITC

Ms. Rashmi Gandhi,

Isn't advartising agency considdred as Pure Agent? They will not be billing additional charges against the total gross amount. If this is applicable then we 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.

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).

Agreed with you V J Hebbar

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/-

Please tell me GST rate on Advertising agency & which tax amount will be chageble under GST( Gross or Agency commission @ 15%)

Mr. Faisal, i have elaborated the Advertising Agency which comes under Pure Agent but the Advertising agency has to full fill the following rules to come under 5% tax slab

(i)             the pure agent makes a payment to a third party, on behalf of the recipient, for procuring a supply when the contract for the supply of services procured is between the third party and the recipient;

(ii)           the recipient of the supply is the only user of the services procured by the pure agent from the third party;

(iii)          the recipient of the supply is liable to make payment to the third party;

(iv)         the recipient of the supply authorizes the pure agent to make payment on his behalf;

(v)           the recipient of the supply knows that the services (for which payment has been made by the pure agent) are provided by the third party;

(vi)         the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the agent;

(vii)        the pure agent recovers from the recipient only such amount as has been paid by him to the third party; and

(viii)      the services procured by the pure agent from the third party are in addition to the supply/service he provides on his own 

Third party = Publication
Recipient of Supply or Service = Client

can you tell me that how will the gst sale bill formate for client if i am advertising agency

will u tell me the gst sales bill formate for clients ,if i am an advertising agency

For Eg.

Publication bill for Advertising Agency will be like

Publication Bill
Net Amt.	5,000.00
15% Discount	750.00
Taxable Amt.	4,250.00
CGST 2.5%	106.25
SGST 2.5%	106.25
Round off	0.50
Payable	4,463.00

and the Advertising Agency Bill to it'c client will be like 

Agency Bill
Net Amt.	5,000.00
Taxable Amt.	5,000.00
CGST 2.5%	125.00
SGST 2.5%	125.00
Round off	-
Payable	5,250.00

Now here you might question why there is a difference in GST amount collected by publication and agency. Agency has to collect and pay the GST amount to the Govt. to the tone of 15% of the face value i.e., 750/- and the publication has to collect and pay the tax on 85% of the face value i.e. 4,250/- but the Agency has to bill at 5% on total face value to collect the same tax amount which he paid to the publication on behalf of his client.

If the agency is giving discount to his client in the bill then he can tax him on post discount amount. Let's say he's giving 5% discount ot his client then his bill be like 

Agency Bill
Net Amt.	5,000.00
5% discount	250.00
Taxable Amt.	4,750.00
CGST 2.5%	118.75
SGST 2.5%	118.75
Round off	-
Payable	4,987.50

on commosion amt 18% rate will be applicable that is 2.7 ,so will we charge 2.7% gst nd cgst and 5% gst by publiction on us of 85% amt so how will be it possible

When a Agency fulfills the 8 points of "Pure Agent" under taxation he cannot be considered as commission agent as he aint paying the tax on 100% face value to the publications and charging additional value while billing to his client. I have explained the same like 30min back...

/forum/details.asp?mod_id=399682&offset=2

And secondly there is no provision for splitting the 1 tax regime amount under 2 different tax regime. That means one cannot raise the invoice like 85% on 5% tax and 15% on 18% tax.