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Advertising agency services
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Posted on 22-07-2006 23:48
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Hiring of hoardings to advertising agencies [who in turn displayed or exhibited their advertisements on such hoardings] was not liable for service tax [Prism Ads vs. CCE (2006) 2 STR 501 (Tri. - Mum.)]. |
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Posted on 22-07-2006 23:56
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Posts: 129
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The act of procuring hoarding space from the municipal authorities for advertisement purposes itself does not amount to taxable service under the category of Advertisement Agency. [Rex Advertisers vs. CST 2006 (2) S.T.R. 330 (Tri.-Bang.)] |
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Posted on 22-07-2006 23:58
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Posts: 129
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Where the appellants made sign boards as per the specifications of the client and installated them for display at different places. The Tribunal held that the appellants were liable for service tax under advertising agency services [Ajanta Fabrication vs. CCE (2006) 2 STR 4 (Tri-Del.)]. |
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Posted on 23-07-2006 00:14
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Posts: 129
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Where the appellants acted only on behalf of the Times of India for selling the printed space for a commission and did not render any service of making or preparing the advertisement, the Tribunal held that its services are not liable for service tax [Bhavya Enterprises vs. CCE (2006) 1 STR 50 (Tri-Del.) Circular No. 64/13/2003-ST dated 28-10-2003 noted].
Where the applicant, a website, provided / sold space for display or exhibition of an advertisement in its web-page and also provided value added services with respect to preparation of an advertisement such as assistance by its sales representative - (i) to design the advertisement in case the proposed expenditure is more than $ 4,000 a month; (ii) for campaign via email where a client or an advertiser would be spending more than $ 30 in a month, the Advance Ruling Authority held that the services would be liable for service tax under the category of advertising agency services. The Authority went on to add "[i]n the proposed activity, the applicant, even by merely providing / selling space for display or exhibition of an advertisement, would be providing a service to the advertisers / clients." The Authority also held that the said services are not liable under the category of business exhibition services. [In Re : Google Online India Pvt. Ltd. (2006) 1 STR 53 (AAR)].
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Posted on 23-07-2006 00:34
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Posts: 129
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The appellants booked spaces in Government buses and then contacted government departments for placing advertisements which was mainly in the nature of general awareness programmes. The advertisements were either readymade or at times prepared by the appellants. The Tribunal held that -
(i) An advertisement is a public announcement which can be made by way of display of any hoardings or otherwise. Advertisement is used to awaken, enlighten and activate the public at large concerning matters that effect the society generally. The fact that such advertisements were public interest advertisements made no difference. Hence the materials displayed would be "advertisements";
(ii) The appellants were an "advertising agency" inasmuch as they made profit out of the said activity of display of advertisements and accordingly were liable for service tax;
(iii) The expenses incurred for making the space available or rental charges paid for getting such space for advertisements are not includable in the value of taxable services.
(iv) The activity of pure hiring of space and providing the same to a person who uses it for advertisements will not attract service tax.
[CCE vs. Azad Publications (2004) 167 ELT 59 (T) and Star Neon Signs v. CCE (2002) 49 RLT 51 (T) distinguished; CCE vs. Gypsy Advertising C. (2004) 171 ELT 271 (T) relied]
Prithvi Associates vs. CCE Mumbai (2005) 70 RLT 483 (CESTAT-Mum.) |
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Posted on 23-07-2006 00:41
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(i) Pure canvassing of advertisements for newspapers for a commission without undertaking the job of making, preparation or display of the advertisement nor undertaking negotiation of price, preparing layout of the advertisement or making the text of the advertisement is not liable for service tax under the category of "advertisement agency services" but is liable for service tax under the category of "business auxiliary services."
(ii) Where the authorities were fully aware of the nature of the activity as early as in January 1998, the demand invoking the extended period of limitation cannot be issued in July 2003, as the entire of demand is subsequent to the disclosure of the nature of activity to the department.
(iii) For quantification the commission received is to be considered as cum-tax and the tax should be excluded in arriving at the value liable to tax as clarified by the Delhi Commissionerate vide Trade Notice No. 20 dated 23-05-2002.
Able adds Pvt. Ltd. (2005) 187 ELT 133 (Commr. Appl.) |
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Posted on 23-07-2006 00:51
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The respondent was a member of the Advertising Club, Chennai which challenged the levy of service tax on advertising before the Madras High Court which granted an interim stay. Subsequently the court vacated the stay and upheld the validity. In this context, the Tribunal held that interest is payable for the entire period of delay in payment of service tax, in the absence of any specific order of the High Court that the period covered by the stay order is to be excluded for the purpose of computing the period of delay.
CCE, Mumbai-IV vs. R. K. Swamy BBDO Advertising Pvt. Ltd. (2005) 186 E.L.T. 291 |
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Posted on 23-07-2006 01:01
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Following CCE vs. Team UPD Ltd. (2005) 179 ELT 469 (T) the Tribunal held that rentals received on leasing of 'Unipole Structure' would not be liable for service tax under the cartegory of advertising agency services.
CCE Chennai vs. Team UPD (2005) 184 ELT 389 (Tri-Chennai)
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Posted on 23-07-2006 01:24
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CCE vs. Team UPD Ltd. - 2005 (179) ELT 469 (Tri-Chennai)
Rental charges received by the respondents for letting out their billboard and printing the advertisements designed, visualized and conceptualized by their customers in their billboard is not liable for service tax since the respondents did not design, visualize or conceptualize the advertisements and accordingly were not an 'advertising agency'. |
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Posted on 23-07-2006 01:28
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CCE, Kolkata vs. The Incoda - 2004 (174) ELT 65 (Tri-Kolkata)
Following CCE vs. Azad Publications - 2004 (167) ELT 59 (Tri-Del) the Tribunal held that the respondent's activity of hiring space in Metro Railway Coaches and in turn providing space to its client for advertisements would not be liable for service tax under the category of advertising services. |
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