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TMI Blog2020 (10) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- i. the advertising agency purchases time/space from Radio Broadcaster or Television Channel for its clients. Radio Broadcaster or Television Channel raised bill in the name of advertising agency, which may or may not show trade discount/additional trade discount. The GST is charged on net amount after all type of discount (if any). Agency raised bill in the name of the client at Govt/Market/Customerized/Deal rates. In this bill advertising agency may show some trade discount/additional trade discount/commission. The GST is charged on net amount after all types of discounts (if any). What will be the classification and tax rate on this supply. ii. the advertising agency purchases time/space from Radio Broadcaster or Television Channel for its clients. Radio Broadcaster or Television Channel raised bill in the name of advertising agency, which may or may not show trade discount/additional trade discount. The GST is charged on net amount after all type of discount (if any). Agency raised bill in the name of the client at Govt/Market/Customerized/Deal rates. In this bill advertising agency shows the Radio Broadcaster/TV Channel amount, discount/additional trade discount (if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company 1 may not show the agency charges/discount/share paid to the agency. Agency raised a separate bill for its share. The GST is charged on the amount after discount/additional discount (if any). What will be the classification and tax rate on this supply. vii. the advertising agency purchases time/space from Internet Company for its clients. Internet Company raised bill in the name of advertising agency, which may or may not show trade discount/additional trade discount. The GST is charged on net amount after all type of discount (if any). Agency raised bill in the name of the client at Govt/Market/Customerized/Deal rates. In this bill advertising agency may show some trade discount/additional trade discount/commission. The GST is charged on net amount after all types of discounts (if any). What will be the classification and tax rate on this supply. viii. the advertising agency purchases time/space from Internet Company for its clients. Internet Company raised bill in the name of advertising agency, which may or may not show trade discount/additional trade discount. The GST is charged on net amount after all type of discount (if any). Agency raised bill in the name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, in which Print Media Company may not show the agency charges/discount/share paid to the agency. Agency raised a separate bill for its share. The GST is charged on the amount after discount/additional discount (if any). What will be the classification and tax rate on this supply. xiii. the advertising agency purchases messages/personal communication in the form of audio, video or text or image or in any other way from Telecom/Internet/Other Company's for its clients. Telecom/Internet/Other Company raised bill in the name of advertising agency, which may or may not show trade discount/additional trade discount. The GST is charged on net amount after all type of discount (if any). Agency raised bill in the name of the client at Govt/Market/Customerized/Deal rates. In this bill advertising agency may show some trade discount/additional trade discount/commission. The GST is charged on net amount after all types of discounts (if any). What will be the classification and tax rate on this supply. xiv. the advertising agency purchases messages/personal communication in the form of audio, video or text or image or in any other way from Telecom/Internet/Other Company's for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment Entity, by way of any activity in relation to any function entrusted to a Panchyat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution is exempted from GST in terms of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time). 1.6 In specified cases where the answer to question 1.5 is in affirmative, then whether supply made by TV/Radio/Outdoor Company/Publication/Internet/Telecom/Other company to the advertising agency is also exempted in terms of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time). 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 subsection (2) of Section 97 of the CGST/SGST Act, 2017 advance ruling can be sought by an applicant in respect of:- (a) Classification of any goods or services or both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of other advertising space or time (except on commission) Notification No. 11/2017-Central Tax(Rate), the 28th June, 2017 G.S.R....(E).-In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (5)of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017),the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of services of description as specified in column (3)of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:- SI.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) 1 Chapter 99 All Services 21 Heading 9983(Other professional, technical and business services (i) Selling of space for adverti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply in case trade discount/additional discount/agency commission is deducted in the invoices raised in the name of the advertising agency by the TV / Radio/ Outdoor Company/ company. In this context, we find that Section 15 of the Act deals with value of taxable supply and the same is reproduced ag under: (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include,- (a) any taxes, duties, cesses, fees and charges levied, under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both; (c) inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier, and the tax liability shall be adjusted in such manner as may be prescribed: Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person. 11.1 On perusal of legal provisions in this regard, we find that the registered person who had issued a credit note, can adjust his tax liability by following the procedure mentioned above, subject to the condition that incidence of tax on such supply, has not been passed on to any other person, Thus we observe that when a supplier requires to decrease the taxable value of a supply, he has to issue a credit note to the recipient and accordingly can reduce his tax liability for the concerned period provided that he has neither charged or collected tax on such supply. 12. As regard to the benefit of Notification No, 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) in respect of the supply made by the advertising agency as mentioned in aforesaid questions to the Central Government, State Government, UT or Local Authority or Government Authority or a Government Entity, by way of any activity in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article 243W of the Constitution. Nil Nil 12.1 On perusal of aforesaid exemption notification, we find that,- (i) services supplied without involving of goods is a pure service (ii) pure service must be supply to the Central Government, State Government or Union territory or local authority or a Governmental authority and supply of pure service is related to an activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. (iii) composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent, of the value of the said composite supply, provided to the Central Government, State Government or Union territory or local authority or a Governmental authority in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution. 12.2 We further find that the Technical Officer (TRU) vide letter F.NO. 254/90/2018-TRU dated 03.05.2018 addressed to Joint Commissioner, CCO, Delhi Z ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gning/fabrication/production shall formed part of Composite supply and shall attract GST at the rate as specified in serial no. (i) Above. (iv) Discounts of any kind shall be excluded from the taxable value subject to the fulfilment of condition prescribed in law. (v) The registered person who has issued credit notes shall adjust his tax liability subject to the fulfilment of condition prescribed in law. (vi) The services provided by the advertising agency to the Central Government. State Government. UT or Local Authority or Government Authority or a Government Entity, by way of any activity in relation to any function entrusted to a Panchyat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243 W of the Constitution is exempted from GST in terms of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) read with clarification dated 03.05.2018 issued by TRU, Department of Revenue. (vii) The specified services, as mentioned in serial no. (vi), provided by Radio/TV/Outdoor/Internet/Telecom/ any other advertiser to the advertising agency, are exempted from GST in terms of Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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