TMI Blog2020 (3) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) 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; (c) selling of space/ time for advertisement in print media by advertising companies is a pure service or otherwise. If yes, whether said pure service is exempted from payment of GST vide Notification No. 12/2017-Central Tax (Rate), dated 28 th June, 2017 when advertising agency is raising bill to Local Authority or otherwise; and (d) if exemption is available to local authority then said exemption is also available to advertising companies or not. 2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 3. As per the said sub-section (2) of Section 97 of the CGST/SGST Act, 2017 advance r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sement agency from the client. They are currently charging GST @ 5% to its clients as per the above provisions. (ii) Supply of services without involving any supply of goods would be treated as supply of 'pure services'. For example, supply of manpower for cleanliness of roads, public places, architect services, consulting engineer services, advisory services, and like services provided by business entities not involving any supply of goods would be treated as supply of pure services. On the other hand, let us take the example of a Governmental authority awarding the work of maintenance of street lights in a Municipal area to an agency which involves apart from maintenance, replacement of defunct lights and other spares. In this case, the scope of the service involves maintenance work and supply of goods, which falls under the works contract services. The exemption is provided to services involves only supply of services and not for works contract services. In the case of ' Sale of space for advertisement in print media it includes sale of space on print media which forms material component of this supply. Material in the form of Newspaper is supplied for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue one by one : (A) Applicability of GST rate on selling of space/ time for advertisement in print media in case of advertising companies. (A.1) In this context we find that 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% [2.5% CGST + 2.5% SGST]. (B) 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. (B.1) In this context, we find that there are two slabs of GST rate prescribed, in respect of supply in question, at Entry No. 21 under Heading 9983 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as under : Entry No. Chapter, Section or Heading S. No. Description of service GST rate 21 9983 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply. (e) In some cases, advertising agency/company have some deals on volume/ value basis with publication and on achieving the target, advertising company/ agency gets some incentive etc. In this case incentive will be charged @ 18%. (B.3) Now coming to the question for decision wherein the applicant has stated that designing, etc., are integral part of supply in question i.e. selling of space in print media. The relevant legal provisions in this regard are reproduced as under : (i) Section 2(30) of the Act, ibid composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; (ii) Section 2(90) of the Act, ibid principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; [(iii)] Section 8 of the Act, ibid : The tax liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject. the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely :- Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 3 Chapter 99 Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017, then said exemption is also available to advertising companies. (D.1) 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 as discussed supra. ORDER 8. In view of the above discussion and findings we hold as under : (i) Selling of space for advertisement in print media by advertising company/ agency shall attract GST @ 5% [2.5% CGST + 2.5% SGST] in case of advertising companies/ agencies in all cases. However Volume incentives/ value incentives are part of commission and cannot be treated as sale of space in print media and therefore incentive will be charged @ 18%. (ii) Composite supply comprises of selling of space in print media and designing/composing of the advertisement, shall attract GST @ 5% [2.5% CGST + 2.5% SGST] inasmuch as selling of space in print media is a principal supply which attract GST @ 5% [2.5% CGST + 2.5% SGST] as on date. Advertisement company/agency sells unit of space in print media to client and designing/co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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