How the rate of ST is falling 1.8% for adv agencies

This query is : Resolved

GANAPATHY.R (Querist)
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06 September 2010 Sir,

Any one can clarify my query.

Normally the rate service tax is 10.3%. But the advertisement agencies charging 1.8 plus EC 3%, how it is working. Please give any one clarification for this. IS there any abatement portion in this.

Pragnesh

Pragnesh (Expert)
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07 September 2010 Service tax is applicable on any advertisement's bill is only 15% of bill amount. because agency is acting as a sub contractor and he is collecting money along with margin which is not more than 15%. There for ST is applicable on only 15% of bill amount.
Regards
Pragnesh