can coaching classes claim input service credit in respect of service tax paid on marketing expenses??
12 Replies
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 01 July 2011
if marketing is in relation to distribution of materials for registration etc then eligible, but mere advertisement is not eligible
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 01 July 2011
| Originally posted by : U S Sharma | ||
 |
if marketing is in relation to distribution of materials for registration etc then eligible, but mere advertisement is not eligible |
 |
AGREED.
Alpana
(Consultant)
(91 Points)
Replied 01 July 2011
Thank you very much for the reply, but can any of u pls throw some light as to why so?? Aren't such expenses a part of advertisement & sales promotion and hence includible in input services??
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 01 July 2011
some details of "marketing expenses" required to discuss the matter, i.e what exact service they provide which can be taken as "input service" for coaching" mere marketing does not indicate any specific service, which can be used in providing coaching.
Alpana
(Consultant)
(91 Points)
Replied 01 July 2011
ok - how about online marketing using justdial & similar other websites?
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 01 July 2011
with a simple logic, how u can define that these services are mandatory needed for providing your services, and without these you can not provide your own services?
input services - the word input itself means that services are taken in or in relation to taxable services provided. however to a reasonable extent input credit availed on these may be overlooked by audit, but its not a fair practice to take credit of services which dont have any nexus with services provided.
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 02 July 2011
In my view the marketing services lead to the demand creation and the need to provide the service itslef. Therefore eligible without doubt.
Whether the coaching class is liable for ST in thelgiht of the not 33 /2011 shouldbe examined iof the same is for education - leading to a degree. - Bcom. BSc/ CA etc.
Earlier only suhc establishments/ institutes which issued a degree were excluded. Now the activity seems to have been excluded.
Alpana
(Consultant)
(91 Points)
Replied 04 July 2011
Mr. Madhukar, thank u for your comment but i dont think it is mandatory to incur marketing expense for provision of services. It is primarily for increasing the number of students and for the visibility. As in the primary purpose of incurring marketing expense is not to provide output service but to promote your business.
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 05 July 2011
In view of the specific inclusion of "sales promition " within the defintion of input service, the admissibility of credit in relation to said marketing is free from doubt.
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 05 July 2011
I diagree with you Alpana. The defintion of input services would include marketing services. Though not essential it is linked ot the service. If one does not advertise they would get less students and their income wouldbe lower.
However there is no complusion to avil credit.
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