TMI BlogService Tax on advertising, courier and pager servicesX X X X Extracts X X X X X X X X Extracts X X X X ..... dvertising consultant. It would, thus, be noticed that the scope of the service which is included in the tax net extends not only to any service connected with making, preparation of advertisements but also includes any service connected with display or exhibition of advertisements. 4. It is further to be clarified that in relation to advertising agency, the service tax is to be computed on the gross amount charged by the advertising agency from the client for services in relation to advertisements. This would, no doubt, include the gross amount charged by the agency from the client for making or preparing the advertisement material, irrespective of the fact that the advertising agency directly undertakes the making or preparation of advertisement or gets it done through another person. However, the amount paid, excluding their own commission, by the advertising agency for space and time in getting the advertisement published in the print media (i.e. Newspapers, periodicals etc.) or the electronic media (Doordarshan, private TV Channels, AIR etc.) Will not be includible in the value of taxable service for the purpose of levy of serviced tax. The commission received by the advert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t when the definition of taxable service in relation to advertisement is interpreted in proper context. Accordingly, it is clarified that a film producer in this case is not liable to service tax. However, the advertising agency will no doubt include the expenses incurred on getting the film or documentary produced on behalf of the client in the gross amount charged from the client on which service tax will be collected by the agency. it goes without saying that if the film producer chooses to charge the client directly for the film or documentary produced by him then the film producer is to be regarded as having rendered service to the client in relation to advertisement and he will, therefore, be liable to pay service tax accordingly. 9. A doubt has been raised whether service tax becomes payable even if the client does not make the payment to the advertising agency. In this context, it is clarified that the advertising agency is legally bound to collect and pay service tax. However, if the advertising agency fails to collect the service tax, the responsibility for payment of tax lies on the advertising agency. The advertising agency, therefore, cannot claim any exemption from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, these express cargo services are also liable to pay service tax. 14. It may be clarified that only such agencies fall within the scope of the term "courier agency" which are commercial concerns. The term "commercial concern" does not include a Government department within its scope. Accordingly, the Speed Post Services provided by the Department of Posts do not attract service tax. 15. It has been pointed out that in some cases one courier agency, who undertakes to deliver the documents, goods or articles received from customers, utilises the services of another company for in-transit movement of such documents etc. from one point to another. These are, technically, called co-loaders. The co-loader undertakes to transport the documents, goods or articles on behalf of the courier agency and charges the courier agency for such services. A question has been raised whether under these circumstances the co-loaders are also liable to pay service tax. 16. In this context, it is clarified that co-loaders provide service to the courier agencies as such. They do not provide directly any service to the customer who gives the documents, goods or articles to the courier agency for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on a quarterly basis for the paging service provided. The service tax will be chargeable on the gross amount charged form the subscriber. Payment of Service Tax 21. It may be mentioned that the service tax is applicable on any service which is provided on or after 1-11-1996. However, it is provided in Section 68(2) of the Finance Act, 1944 that a person responsible for collecting the service tax is required to pay the service tax collected during any calendar month to the Government account by the 15th of the next month. Accordingly, what is actually collected by the advertising agency in a given month as service tax from its clients has, of course, to be deposited to the account of the Central Government by the 15th of next month. It has been decided that notwithstanding the provisions of Section 68(3) of the Finance Act, 1994, an advertising agency may be asked to pay the tax collected in a given month and not the amount of tax payable on the bills raised in that month. Nevertheless, the legal liability to pay the tax on the bills raised during the month lies on the advertising agency. This not only applies to advertising agencies (including hoarders) but also to courier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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