We are an advertising agency primarily dealing in advertisements in newspapers . I have to give you a detailed narration .I apologise for the same .
Our Business Model :
As on date , We have a turnover of Rs 50.00 crores .Our clients are basically from automobile industry. They give us the size , date . and the paper in which the ad would be published .We design the advertisement as per their requirements and send it to the respective papers for publication . After this we raise the invoice and send it to our clients. All publications give us 15 % commission on bill ,which is a an accepted norm as far as print media is concerned . Earlier ,we paid service tax on 15% commission "on the value before discount to our clients " and . and was added invoice , collected and paid to the gvt .
Now , we are not clear as to how to bill our clients with GST .We request you to advise us on the following issues.
A) Purchase side( purchasing space in paper) : 1) Since print media is levied 5% gst ,we pay the publications( our purchase of space amount from publications) +gst (5%) eg) If total bill our publication is Rs 100 ,then 15% is deducted as commission and we pay only the remaining Rs 85 +( 5% gst =4.25)= 85+4.25 =89.25 . Hope ,we are clear up to this .If not what is to be done
B) Sale Side( invoice)
Our billing method Before GST (With service tax)
Gross Amount Rs 100 ,say 10% our clients discount =90 = service tax 15% on 15 Rs of commission (since this is only our income ) 2.25 90+2.25 =92.25 net billed to our client
After GST Gross Amount Rs 100 ,say 10% our clients discount =90 = ( How to levy GST ) (as per the GST council Advertising agency is to pay 12%gst on space selling .and if use computers in designing it is 18% .
How to bill our client ? 1) Rs 100 +5% paid to our publications to get input credit and (Whether we should ad 12 % OR 18% of 15%) = (Rs 15 *12% =1.8) or (Rs 15*18%=2.7 )
17 July 2017
We are talking about Income Tax TDS right? See the point so far as Income Tax TDS is concerned......in some sections the word used is PAYMENT..(Here TDS is to be made on Gross amount...ok?) However, in some sections the word used is INCOME,.... in such cases, the TDS is to be done on NET amount i.e. without GST etc.....
18 July 2017
Well , only you can infer about this .We are in service sector so we report our sales as in Profit and Loss Account as Gross income . None of the advertising agency is clear about billing post GST about the rates ( 5% /12% /18% ) .Most of us are adopting trial and error method . However, . In order to make correct billing i sought your advice . Hope Iam clear about what I want .
18 July 2017
Assuming 12% GST. There are 2 schools of thoughts. 01. If you want to pass on the ITC to your client and Keeping your earlier PROFIT of Rs. 5 per 100 as CONSTANT You can bill your clients at 90 + add 12% gst i.e.10.80 = gross bill.. 100.80 Out of this 100.80; to be received from your client; your gst payable liability would be 10.80-4.25 = 6.55 This will keep your profit intact at 5 per 100 02. Under the pretext of gst, take this as opportunity to increase your price to say 91....and that will increase your profit to 6 per 100 (Note : Client should be made aware that if GST is charged by GST authorities at 18% in place of 12%, he will have to make the loss good.)
CAclubindia
