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The Finance Ministry on Wednesday said the rate of Goods and Services Tax (GST) applicable on selling of advertisement space in print media would depend on the terms of the contract between the newspaper, advertisement agency and the client.
A five per cent GST would be levied on the newspaper or an advertisement agency, which works on principal to principal basis, that is, buys space from the newspaper and sells such space for advertisement to clients on its own account.
But if the agency sells space for advertisement as an agent of the newspaper on commission basis, an 18 per cent GST would be levied on its commission fee. “Input tax credit of GST paid on such sale commission would be available to the newspaper,” it said. GST of 18 per cent would also be levied on other services provided by the advertisement agency such as designing or drafting the advertisement, which is not a part of any composite supply.
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