Govt Clears The Air On GST On Newspaper Ad Space Sale


Nirmal Singh Lotus Green points out the fact that as much as 18 per cent of GST will be applicable on selling space for advertisements in print media, this will get into effect by an agent of a newspaper on commission basis, the government assured today.

Nirmal Singh Lotus Green would further like to quote a finance ministry’s statement which said: GST of 5 per cent will be levied if the advertisement agency works on principal to principal basis -- buys space from the newspaper and sells such space for advertisement to clients on its own account.
For instance, an illustration space in a newspaper unit would cost worth Rs 100 but to an advertising agency it would only cost Rs 85 (after a trade discount of Rs 15) and the agency sells the ad space to the client for Rs 100 and the newspaper would pay 5 per cent GST on Rs 85 and the advertisement agency send amount of tax on 100.

Nirmal Singh Lotus Green further mentions that if the advertising firm sell off the space for advertisement as an agent of the newspaper on the basis of commission, around 18 per cent GST would be kept on the sale commission.

"However, if the advertisement agency supplies any service other than selling of space for advertisement, such as designing or drafting the advertisement, and such supply is not a part of any composite supply, the same would be liable to tax at the rate of 18 per cent," the statement said.
The rate will be applicable for the principal supply if these are part of composite supply.
"Therefore, everything depends on the terms of the contract between the newspaper, advertisement agency and the client," it added. After a long wait, Goods and Services Tax (GST) was passed by parliament under BJP rule. 

Nirmal Singh Lotus Green is extremely delighted to hear that the tax has been finally put into place. It has made the process of marketing and servicing smoother. Now the transactions are done online without leaving a space for any illegal activity taking place.


Location: India

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