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2020 (3) TMI 293 - AAR - GSTExemption from GST - Pure services - selling of space/ time for advertisement in print media in case of advertising companies - advertising company/ agency sells unit of Space in print media to client and designing/ composing is being done by advertising company/agency without charging separately in the bill for designing, etc., to client - selling of space/ time for advertisement in print media by advertising companies. Applicability of GST rate on selling of space/ time for advertisement in print media in case of advertising companies - HELD THAT:- The selling of space/time for advertisement in print media is mentioned at Entry No. 21 under Heading 9983 of Notification No. 11/2017-Central Tax (Rate), dated 28-6 2017 which attract GST @ 5%. Applicability of GST rate if advertising company/agency sells unit of space in print media to client and designing/composing is being done by advertising company/ agency without charging separately in the bill for designing, etc., to client - HELD THAT:- The selling of space for advertisements in print media and other related services would attract 5 and 18 per cent. GST respectively, depending on the terms of the contract between the newspaper, advertisement agency and the client. GST rate on designing, etc., are integral part of supply in question i.e. selling of space in print media - HELD THAT:- There is involvement of two supply of services (i) selling of space in print media and (ii) designing/composing of the advertisement. Accordingly the same falls under the definition of "composite supply" inasmuch as two taxable supplies of services are naturally bundled and supplied in conjunction with each other in the ordinary course of business - composite supply comprises of selling of space in print media and designing/composing of the advertisement, will attract GST @ 5% inasmuch as "selling of space in print media" is a principal supply which attract GST @ 5%. Selling of space/time for advertisement in print media by advertising companies is a pure service or otherwise - whether said pure service is exempted from payment of GST vide Notification No. 12/2017-Central Tax (Rate), dated 28th June, 2017 when advertising agency is raising bill to Local Authority or otherwise? - HELD THAT:- The applicant argued that "sale of space for advertisement in print media" includes invariably includes supply of material in the form of newspaper and the material component forms a major part of the value of said supply. Thus said supply does not fall in the category of "Pure Services" - in terms of Section 7(1) of the Act, read with Schedule I appended to the Act, 'supply' includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. We observe that supply is the term replaced for the term sale; no scope has been left for any confusion and the definition includes every term which shall be coined as sale. Even the supply which is made or agreed to be made without a consideration will also amount to sale. The applicant in their submissions vehemently argued that the bills issued to the clients is invariably inclusive of cost of material as newspaper itself is a form of material and advertisement rates are based on circulation of newspapers. Thus if such is a case, then the service in question is not a "pure service" in terms of Notification No. 12/2017-CentraI Tax (Rate), dated 28-6-2017 (as amended from time to time) as it involves the supply of goods also, therefore in such circumstances the said supply is out of the ambit of said notification. If exemption is available in terms of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017, then said exemption is also available to advertising companies - The Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 (as amended from time to time) is not available to the service provider i.e. advertising agency.
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