05 July 2017
Hi,
I run an advertising agency primarily dealing in print media.
As per Service rates booklet on CBEC website rate for Sale of space in print media 5% GST is applicable and GST rate of 18% is applicable on SAC 998362 (Purchase or sale of advertising space or time, on commission).
The confusion begins when 1 buy space from a publication and sell it to client. Publications sell space on X rate which is a gross rate trade discount is X - 15% for eg: cost of space is Rs. 100 amount charged to client is Rs. 100 amount paid to publication is Rs. 85.
Assuming that publication will invoice me Rs. 100 less Rs. 15 i.e Rs. 85 plus 5% GST.
How am I supposed to invoice my client, I have sold space to my client at Rs. 100. Should I invoice Rs. 100 + 5% GST or Rs. 100 + 18% GST OR Rs. 85 +5% GST + Rs. 15 + 18% GST.
27 July 2024
### GST on Space in Print Media and Commission for Advertising
**1. **Understanding the GST Rates and Invoicing:**
**A. **GST Rates for Different Transactions:**
1. **Sale of Space in Print Media:** This is typically taxed at **5% GST**. 2. **Purchase or Sale of Advertising Space on Commission:** The applicable GST rate is **18%**.
**B. **Scenario Breakdown:**
In your scenario, you are purchasing advertising space from a publication and then selling it to your client. Let's break down the invoicing and GST implications based on the given rates:
### **2. **Details and GST Calculation:**
**A. **Purchasing Space from Publication:**
- **Cost of Space:** Rs. 100 - **Discount Provided:** Rs. 15 - **Effective Cost (Invoice Amount):** Rs. 85 - **GST on Purchase from Publication:** 5% of Rs. 85 = Rs. 4.25 - **Total Invoice Amount from Publication:** Rs. 85 + Rs. 4.25 = Rs. 89.25
**B. **Selling Space to Client:**
- **Amount Charged to Client:** Rs. 100 - **GST Rate on Sale of Space:** 5% GST on Rs. 100 = Rs. 5 - **Total Invoice Amount to Client:** Rs. 100 + Rs. 5 = Rs. 105
### **3. **Invoicing and GST Treatment:**
**A. **Invoicing from Publication to You:**
- **Invoice Amount from Publication:** Rs. 85 - **GST (5%) on Rs. 85:** Rs. 4.25 - **Total:** Rs. 89.25
**B. **Invoicing to Client:**
- **Amount Charged to Client:** Rs. 100 - **GST on Sale of Space (5%):** Rs. 5 - **Total Invoice Amount:** Rs. 100 + Rs. 5 = Rs. 105
### **4. **ITC and GST Reporting:**
**A. **Claiming ITC:**
- **ITC on Purchase:** You can claim input tax credit (ITC) on the GST of Rs. 4.25 paid to the publication as the space is being used for the purpose of providing your advertising services.
**B. **Reporting GST:**
- **On Purchase:** Report the GST of Rs. 4.25 under the appropriate section of your GST return as ITC. - **On Sale:** Report the GST of Rs. 5 collected from the client in your GST return (GSTR-1) and pay it through GSTR-3B.
### **5. **Summary:**
1. **Invoice from Publication:** Rs. 85 + 5% GST = Rs. 89.25. 2. **Invoice to Client:** Rs. 100 + 5% GST = Rs. 105. 3. **GST Rate on Sale of Space:** 5%. 4. **GST Rate on Commission:** 18% (if applicable to other services, but not directly related to the sale of space).
### **References:**
- **GST Rate Notifications:** Relevant notifications detailing GST rates for print media and advertising services. - **HSN Codes and SAC Codes:** For accurate classification of services and appropriate GST rates.
For precise advice tailored to your situation and any additional complexities, consulting with a GST professional or tax advisor is recommended.
CAclubindia
