In re Harmilap Media (P) Limited (GST AAR Uttarakhand)
(i) Selling of Space for advertisement in print media shall attract GST @ 5%[2.5% CGST+2.5% SGST] and in all other cases, the GST shall be attracted @ 18% [9% CGST+ 9% SGST] as on date.
(ii) Classification of services shall be as under:
| Annexure: Scheme of Classification of Services | |||
| S.No. | Chapter, Section, Heading or Group | Service Code (Tariff) | Service Description |
| (1) | (2) | (3) | (4) |
| 338 | Group 99836 | Advertising services and provision of advertising space or time | |
| 339 | 998361 | Advertising Services | |
| 340 | 998362 | Purchase or sale of advertising space or time, on commission | |
| 341 | 998363 | Sale of advertising space in print media (except on commission) | |
| 342 | 998364 | Sale of television and radio advertising time | |
| 343 | 998365 | Sale of internet advertising space | |
| 344 | 998366 | Sale of other advertising space or time (except on commission) | |
(iii) The designing/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 Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time).
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, UTTARAKHAND
1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act) and the rules made thereunder filed by M/s Harmilap Media (P) Ltd, 2nd Floor, C-24, Medo Plaza, Rajpur Road, Dehradun seeking an advance ruling on classification, applicability of notification , value of supply & rate of tax thereon on various mode of agreements as mentioned there 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 any) and its media buying charges/agency charges separately. Both are added and GST is charged on sum of both amounts. What will be the classification and tax rate on this supply.
iii. the advertising agency purchases time/space from Radio Broadcaster or Television Channel for its clients. Broadcaster or Television Channel raised bill in the name of the client, whose advertisement is telecasted/broadcasted. The bill may show advertising agency charges/discount/share to be paid to agency. There may be a case, in which Radio Broadcaster or Television Channel 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.
iv. the advertising agency purchases space from Outdoor Company for it’s client. The Outdoor 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.
v. the advertising agency purchases time/space from Outdoor Company for its clients. Outdoor 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 shows the Outdoor Company amount, discount/additional trade discount (if any) and its media buying charges/agency charges separately. Both are added and GST is charged on sum of both amounts. What will be the classification and tax rate on this supply.
vi. the advertising agency purchases time/space from Outdoor Company for its clients. Outdoor Company raised bill in the name of the client, whose advertisement is telecasted/broadcasted. The bill may show advertising agency charges/discount/share to be paid to agency. There may be a case, in which Outdoor 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 client. In this bill advertising agency shows the Internet Company amount, discount/additional trade discount (if any) and its media buying charges/agency charges separately. Both are added and GST is charged on sum of both amounts. What will be the classification and tax rate on this supply.
ix. the advertising agency purchases time/space from Internet Company for its clients. Internet Company raised bill in the name of the client, whose advertisement is telecasted/broadcasted. The bill may show advertising agency charges/discount/share to be paid to agency. There may be a case, in which Internet 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.
x. the advertising agency purchases time/space from Print Media Company for its clients. Print Media 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.
xi. the advertising agency purchases time/space from Print Media Company for its clients. Print Media 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. In this bill advertising agency shows the Print Media Company amount, discount/additional trade discount (if any) and its media buying charges/agency charges separately. Both are added and GST is charged on sum of both amounts. What will be the classification and tax rate on this supply.
xii. the advertising agency purchases time/space from Print Media Company for its clients. Print Media raised bill in the name of the client, whose advertisement is telecasted/broadcasted. The bill may show advertising agency charges/discount/share to be paid to agency. There may be a 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 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. In this bill advertising agency shows the Telecom/Internet/Other Company amount, discount/additional trade discount (if any) and its media buying charges/agency charges separately. Both are added and GST is charged on sum of both amounts. What will be the classification and tax rate on this supply
xv. 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 the client, whose advertisement is telecasted/broadcasted. The bill may show advertising agency charges/discount/share to be paid to agency. There may be a case, in which Telecom/Internet/Other 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.
1.1 What will be the classification and taxability, in case designing/fabrication/production is bundled with the services provided in question (i) to (xv) above and is not being billed separately.
1.2 What will be the value of 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/Publication/Internet/Telecom/Other company.
1.3 What will be the taxability of cash discount received by the advertising agency, in context of transactions mentioned in above questions, at the time of making payment to TV/Radio/Outdoor Company / Publication/ Internet/Telecom/Other company.
1.4 What will be the taxability of value/volume based discount received by the advertising agency, from TV/Radio/Outdoor Company/Publication/Internet/Telecom/Other company in the form of credit notes issued after the date of invoice.
1.5 Whether 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 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
(b) Applicability of a notification issued under the provisions of this Act, /(c) Determination of time and value of supply of goods or services or both,
(d) Admissibility of input tax credit of tax paid or deemed to have been paid
(e) Determination of the liability to pay tax on any goods or services or both
(f) Whether the applicant is required to be registered
(g) Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both within the meaning of that term
4. In the present case applicant has sought advance ruling on applicability of GST rate on supply of goods and their classification. Therefore, in terms of said Section 97(2)(a), (b), (c ) & (e) of CGST/SGST Act, 2017, the present application is hereby admitted.
5. Accordingly opportunity of personal hearing was granted to the applicant on————. Shri—————–, on behalf of the applicant appeared for personal hearing on the said date. Ms Preeti Manral, Deputy Commissioner, SGST-Dehradun, concerned officer appointed by the State Authority, also present during the hearing proceedings.
6. In the present case we are not deciding any wider question but restricting our conclusion to the facts and circumstances which was filed for our consideration in the application. Now we proceed by taking the issue one by one:
7. On perusal of various mode of agreements (supra), we find that the classification and rate of tax has already been determined vide Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) which are self explanatory and therefore do not require any elaboration. The relevant provisions of the said notification are reproduced below for ready reference:
