TMI Blog1997 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... provided to a client by an advertising agency in relation to advertisements in any manner. Section 66 is the charging section which provides that there shall be charged a service tax at the rate of 5% of the value of the taxable service. Section 67 provides for valuation of taxable service for charging the service tax and clause (d) provides that in relation to service provided by an advertising agency to a client, the gross amount charged by such agency from the client shall be for services in relation to the advertising. 3. It is submitted that advertising service is a skill of expression and there is a fundamental right to freedom of speech [and] expression guaranteed by Article 19(1) of the Constitution and, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes, the freedom of press would not be totally lost. The Supreme Court observed that while there can be no tax on the freedom of expression, tax can be levied on profession, occupation, trade, industry or business and hence the tax was leviable on newspaper industries also. It is only when tax measure stifles the freedom of expression, it invites interference of the Court. It is, thus, clear and well settled that a tax on activity which may be of expression, is not immune from tax. 5. In the present case, the rate of tax is 5% of the gross amount charged by the advertising agency from the client for services in relation to advertising. This cannot be said to be in any manner unreasonable. In fact, it is on the lower side, and such cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to provision of Entry 92A of List I. Entry 92A is Inter-State sales tax. The present tax on advertising services cannot be by any stretch of imagination be brought into Entry "Sale or Purchase of goods". It is also contended that this tax is a tax on advertising service - a profession or calling and would fall under State List Entry 60 i.e. taxes on professions, trades, callings and employments. This is not a tax on any profession, trade, calling or employment, but is in respect of the service rendered. If there is no service, there is no tax. 9. In the case of Western India Theatres Ltd. v. Cantonment Board, Poona , AIR 1959 SC 582, it was held that the entertainment tax is not imposed for the privilege of carrying on any t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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