advertisement on rates of taxes fall under which category of advertisement
Answers
Advertisements play a very important role in the success of every business. It is estimated that Advertising expenditure for the Calendar Year 2018 would be approximately 0.45% of the Indian GDP.
This article focuses on the following aspects:
Taxability of Advertising Sector pre GST
Advertising Sector under GST and rate of taxes
Advertisement through advertisement agencies
Advertisement through registered person outside India
Input Tax GST credit on Advertising services
SAC codes of Advertising services
1. Taxability of Advertising Sector pre GST
With the introduction of Service Tax on all services (other than those covered under negative list) w.e.f July 1, 2012, service tax was applicable on all the aspects of advertising services except the sale of space or time for advertisement in some instances. Accordingly, the sale of time slots in between programs which are being telecasted on television, the sale of space on hoardings, and such were not liable to tax. However w.e.f October 1, 2014, the negative list was amended to restrict the non-taxability to the sale of space in print media and all the other sale of space/time arrangements were brought under the net of service tax.
2. Advertising Sector under GST and rate of taxes
GST is applicable to all modes of advertising including the sale of space in print media
While this leads to an increase in cash outflow, the free flow of credits on the procurement side leads to an overall reduction in the value of advertising.
a. GST on advertising through digital media
In these transactions, there are two parties involved – the advertiser and the publisher.
Advertiser – Who wants to advertise a product, idea, website, mobile application etc;
Publisher – Who publishes these advertisements. The advertisement can be published in various digital mediums like Websites, E-mails or SMS.
Advertisement on digital media is liable to GST at the rate of 18%.
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Answer:
Explanation:
Input Tax Credit (ITC) will not be available on the Goods and Services Tax (GST) paid on expenses incurred towards promotional schemes, an order by the Maharashtra Authority for Advance Ruling (AAR) has said.