Service Tax Newpaper Advt on behalf of subscribers

We have web portals.  We have subscibers.  We charge an amount to our subscribers.  As part of the service we provide to subscibers, we take out classified newspaper advertisements (one or many depending of the duration of the subscripttion).  We do not charge the subscribers separately for the classified ads.  We do not pay the newspapers separately for each subscriber.  We have negotiated a monthly payment rate with the newspapers.

Can we deduct the amount we pay to the newspapers while caclulating the total amount on which we have to pay service tax?

Replies (1)

Dear Rajiv,

U can deduct cenvat/input credit of service tax but not the expenditure incurred during the course of providing services...

Except - 1) N/No/ 12/2003 where cost of goods suuplied can be deducted, but in ur case no goods were supplied to the customer...

2) In case of Pure Agent, u can deduct expenditure, but I don't think in ur case the conditions of pure agent are fulfilled.

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