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Taxable value

Ramees (CA Final Student) (87 Points)

22 December 2012

Hello Everyone..

Merry Christmas & a very happy new year in Advance..!!!!

My Question is -

I have an Advertising Agency.. customers come to me for advertising in newspaper.. I collects the matter(no designing is done by me) and amount as per the rate fixed by Newspaper Company (the Hindu, indian Express Etc..) from them.. In return, the newspaper Company gives me Discount which is my income...

Am I liable to Service Tax and if yes, what is the taxable value??? The Discount or the entire amount collected from clients..???

Can I issue separate bill with whole amount of the advertisement in my name to the clients???

If the client wish to deduct tax (TDS) from me, on what amount they should makeTDS??? my income or advertisement Amount???

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2 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 22 December 2012

1) You shall be liable to Service Tax, if your Gross Receipts during the financial year exceed Rs. 10 Lakhs. Secondly, Service Tax will be charged on entire amount collected from Client.

2) Yes. You can issue separate bill for the Advertisement and sepaprate bill for your Commission.

3) Your client is liable to deduct TDS on the amount of Bill submitted by you. If you submit a Bill which includes the Advertisement and Service Charges then TDS shall be deducted on the whole Bill as per the rates prescribed.

Happy New Year in Advance !!!

Regards,

Devendra Kulkarni