Case Law Details
The Advertising Corporation of India Private Limited Vs Commissioner of Service Tax (CESTAT Kolkata)
Introduction: The case of The Advertising Corporation of India Private Limited vs. Commissioner of Service Tax, adjudicated by CESTAT Kolkata, revolves around the liability of the advertising agency to pay service tax on advertising services provided to the Government of India. This article provides an in-depth analysis of the case and its implications.
1. Common Issue in Appeals: This case encompasses multiple appeals filed by both the parties, addressing a common issue. All the appeals are disposed of by a single, comprehensive order.
2. Facts of the Case: The appellant operates as an advertising agency, primarily involved in procuring advertisements for media and earning a 15% commission on the total bill generated for advertisements. The revenue contends that the appellant availed an 85% exemption on the value of taxable service during the impugned period without legal authorization. Additionally, the appellant did not incorporate the entire value of taxable service in their ST-3 return, leading to non-payment of service tax. Consequently, two show cause notices were issued to demand service tax and impose penalties.
3. Appeals and Challenges: Both sides filed appeals against the impugned orders. The appellant challenges the confirmation of the demand for service tax paid by the advertiser on their behalf and claims that services provided to government agencies are exempt from service tax. They also argue that service tax is not applicable to the discounts received. The revenue’s appeal centers on the contention that the 85% abatement was not permissible for the appellant.
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