Chhattisgarh Samvad Vs Principal Commissioner (CESTAT Delhi)
Conclusion: Demand of service tax on selling of space for advertisements was payable only after 2014 and according to assessee, the entire demand under this head was for the period before 2014. The demand was accordingly set aside subject to verification by the Commissioner. Service tax on service charges on printing collected in the post negative list was upheld.
Held: Assessee was created as an associate organization of the Department of Public Relations, Government of Chhattisgarh to provide multi-media advertising and publicity for various schemes of that Government. The departments and organizations place orders on assessee which had an in-house expert team to prepare the content for the advertisements, hoardings, ad-films, posters, etc. After the designs were approved by the client department, assessee got the advertisements published through empanelled agencies which prepare the hoardings, audio visuals, etc. and publish the advertisements. Assessee invoiced the client department for a consolidated sum towards the amounts charged by the empanelled agencies, service tax on their services and 10% or 15% as its service charges and service tax on its service charges. Assessee collected the entire amount and paid the empanelled agencies for their services. Assessee was registered with the service tax department and had been filing Service Tax Returns. Assessee’s records for the period 1.4.2011 to 30.6.2015 were audited and it was felt that assessee had not paid service tax on certain services which it had rendered and also that it had collected certain sums from the clients as representing service tax but did not deposit the amounts as service tax. Accordingly, a Show Cause Notice was issued to assessee which culminated in the impugned order demand of service tax on sale of space for advertisements Rs. 2,54,66,253/-; demand of service tax which was collected from the clients and paid to the empaneled agencies Rs. 8,37,18,644/- ; demand on 10% service charges collected in respect of printing work under the head ‘Advertising agency service’ in the pre-negative list regime Rs. 24,22,055/; demand on 10% service charges collected in respect of printing work during the post negative list periodRs. 77,53,283/-. It was held that the demand of service tax on selling of space for advertisements was payable only after 2014 and according to assessee, the entire demand under this head was for the period before 2014. The demand was accordingly set aside subject to verification by the Commissioner. If any part of the demand in the impugned order under this head pertained to the post 2014 period, the demand was upheld to that extent. The demand of amounts said to have been collected as service tax from the client departments and not deposited need not be deposited to the extent they were merely collected and paid to the empanelled agencies. The Commissioner may verify the documents for the purpose. Assessee should submit all documents to the Commissioner within four weeks from the date of this order. Service tax on service charges on printing collected in the post negative list was upheld.
