Services Tax for Advertisement agencies

This query is : Resolved

Vijay Sakhare (Querist)
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08 July 2009 Dear Sir,
advertisement agencies services tax deducted for normal margin 15%. for given publication.

But one agencies services deducted after discount for costumer. for example :

Bill Amount Rs. 10000
Discount 7% 700
After Dis. 9300
Margin 15% 1395
Services Tax 8% 111.6

(Marging 15% Less 7% discount Balance Margin 8%)
This is posible. plz ans. me.

thanx

Vijay Sakhare
9975796219

ADITYA

ADITYA (Expert)
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10 July 2009 Dear Sakhare,

Please note that Service Tax liability is always on receipt Basis.It is payable on The Gross Receipt which includes your profit / Margin also.
AS asked by you after providing discount, if you raise a bill of Rs 9,300/= + Service Tax (10.30%)958/= comes to Rs10258/= & receives the same amount i.e. Rs 10,258/= from your Customer. You will be liable to Pay ST of Rs 958/=.
However, if your customer pays you lesser amount (whatsoever reason), your liability of ST will be proportionately reduced.

The ST Liability is always on the ACTUAL RECEIPT BASIS & NOT on Billing Basis.

Hope matter is clear.