Service tax on online promotion

Dear Sir/Madam,

My client makes online Promotion on portals like Facebook,Google,etc wherein he charges rate difference plus commission.

For Example: If Facebook charges charges him 80, my client would charge 80 + 20 (rate difference) + 10 (commission)to his clients. Kindly tell me as to on what amount should the service tax be charged ?

on 20+10 ?

on 80+20+10?

on 10?

As per entry (g)of the negative list Selling of Space or Time Slots for Advertisements other than Advertisements Broadcast by Radio or Television are not taxable under Service tax.

So should that 80 be deducted and on balance 20+10 Service Tax should be levied or on the total gross amount ??

If my client do not wish to reveal his margin(20) than on what amount the service tax should be levied ?

 

Replies (2)

Dear Tina,

 

As you said, Selling of Advt slots is not chargeable, the amount charged by Facebook is not laible to ST. 

 

However, you have to charge ST on the amount of commission charged by you.

Also, you may have to check whether you have to charge ST on the full amount recd from your client since, you are not per se selling the slot, but are just providing advertising service, which includes BOOKING of the time slot

 

Hence, according to me, Facebook may not charge ST, but you may have to charge on the full amount of 110.

 

-Ankit

I jus hope Reverse charge mechanism is not applicable here

 

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