Triton Communication Pvt Ltd Vs C.S.T (CESTAT Ahmedabad)
CESTAT Ahmedabad held that an advertising agency, acting as a mediator between clients and broadcasters, is not liable to deposit service tax under Section 73A, as the agency did not retain the collected tax and the broadcasters had already paid it to the government.
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Ahmedabad has set aside a service tax demand of over Rs. 5.7 crore against Triton Communication Pvt. Ltd. The tribunal ruled that the company, an advertising agency, was not liable to pay service tax on broadcasting services because it acted merely as a facilitator or mediator. The CESTAT found that Triton had collected the service tax amount from its clients and passed it on entirely to the broadcasters, who had already deposited the tax with the government.
The case originated from a show cause notice issued to Triton Communication on October 24, 2013, alleging that the company had collected service tax from its clients for “Broadcasting Service” but had failed to deposit it with the Central Government, in violation of Section 73A(2) of the Finance Act, 1994. The company’s records showed that it purchased time slots from electronic media (broadcasters) for which it received a commission. It then sold these slots to its clients for screening advertisements. The broadcasters billed Triton for the slots and charged them service tax on broadcasting services, which Triton, in turn, included in its bills to the clients.
