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GST-on-selling-advertisement-space-on-Print-Media

 

GST on selling advertisement space on Print Media

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See the related post : GST on Goods Transport Agency

Advertisement in newspapers can be given directly or through advertisement agency. Advertisement agency sells space for advertisement to client either on his own account or either an agent. The GST will be levied as under-

1. “If an advertisement agency buys space from the newspaper and sells such space for advertisement to clients on its own account”.

                                                            OR

2. “If the advertisement agency sells space for advertisement as an agent of the newspaper on commission basis”

                                                            OR

3. “If a Newspaper sells advertisement space directly to clients”

 

Rate of GST-
 

Case -1, “If an advertisement agency buys space from the newspaper and sells such space for advertisement to clients on its own account”- GST will be charged @ 5%.

Example, 1-

If “Hindustan Times” (Newspaper), sells a unit of space worth Rs 5,000 to an “Gagan News Agency” (Advertisement agency) for Rs. 4,400 (after a trade discount of Rs. 600) and the advertisement agency sells the same unit of space to client at Rs 5,200. What will be GST liability?

Answer-

The Hindustan Times, newspaper would be liable to pay GST @ 5% on Rs 4,400 comes to Rs. 220/-

                                                                      &

The Gagan News Agency, advertisement agency would be liable to pay GST @ 5% on Rs 5,200 comes to Rs. 260/- and the advertisement agency can take input tax credit (ITC) of Rs 220/-.

 

Case 2- “If the advertisement agency sells space for advertisement as an agent of the newspaper on commission basis, it would be liable to pay GST at 18 per cent on the sale commission it receives from the newspaper."

Example, 2-

If “Gagan News Agency” (Advertising agency) sells an advertisement as an agent of “Hindustan Times” (Newspaper), to any client for Rs. 5,500, the advertisement agency (Gagan News Agency) charged sales commission of Rs. 500/- on account of sells an advertisement. What will be GST liability?

Answer-

The Hindustan Times, newspaper would be liable to pay GST @ 5% on Rs 5,500 comes to Rs. 275/-

                                                                        &

The “Gagan News Agency” (Advertisement agency), would be liable to pay GST @ 18% on sales commission of Rs. 500 which comes to Rs. 90/-

                                                                        &

GST paid by Advertisement agency of Rs. 90/- shall be available as ITC to “Hindustan Times” (newspaper) which can be adjusted with the payment of GST of Rs. 275/- (i.e. 5% on Rs 5,500).

 

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 @ 18%.

 

Case -3, “If an advertisement space sells by newspaper directly”- GST will be charged @ 5%.

Example, 3-

If “Hindustan Times” (Newspaper), sells a unit of space worth Rs 50,000 to any client says “Hindustan Liver Limited” directly. What will be GST liability?

Answer-

The Hindustan Times, newspaper would be liable to pay GST @ 5% on Rs 50,000 which comes to Rs. 2,500/-

                                                                      &

The client “Hindustan Liver Limited” can take input tax credit (ITC) of Rs 2,500/-.




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