Recently we received an invoice from an advertising agent for space booking in print media The Hindu newspaper. The agent has charged 1.854% service tax on basic cost. We understand that the service tax on commission earned by the agent from newspaper should not be recovered from the advertiser but should be recovered from the newspaper.
On contesting the invoice the agency has sent us a communication dated 5th May 2008 issued by GOI, MOF, TRU Dept. Of Revenue addressed to Executive Secretary, Advertising Agencies Association of India, Mumbai arguing that they are entitled to charge service tax on commission from the advertiser. We do not know if the TRU communication is binding as on date or has been withdrawn.
In this backdrop we request your goodselves to provide your valuable views on the matter please.
Regards,
CAclubindia
