What is the GST rate on Supply of Space for Advertisements in Print Media? In M/S Time Education Kolkata Private Limited – (2022) (7) TMI 750, the appellant was in the business of purchasing and supply of advertisement space to the customers. So, the appellant sought an advance ruling before the Authority of Advance Ruling, Telangana on the following questions:

1. Whether the services supplied by the applicant can be termed as the supply of space for advertisement in print media?
2. If yes, GST @ 5 % can be charged on the invoices raised to the customers?

It is pertinent to mention here that the appellant doesn’t charge for the artwork in certain cases on the ground that artwork forms a part of the composite supply of advertisement space and artwork therefore the GST attracts 5% under HSN 998363.

The Authority of Advance Ruling relied upon the Notification No. 11/2017 – Central Tax (Rate), dated 28.06.2017, where the notification makes a clear distinction between the sale of mere advertisement space and other advertisement space and both have separate rates of GST under the said notification. The Authority of Advance Authority held that there are two different services and will not fall under the composite supply that’s why both will attract the separate tariffs rate under the said notification.

GST on selling of space for advertisement in print & other media

The Authority of Advance Ruling Ruled that the service by the applicant falls under the ‘Other advertisement space ‘which has a different SAC code that is 998366 and GST shall be levied at the rate of 18%.

Being Aggrieved by the ruling of the Authority of Advance Ruling, Telangana, the appellant filed an appeal before the Appellate Authority for Advance Ruling. The appellant submitted that the service falls under the composite supply and which will attract the 5% GST rate under the HSN code 998363.

The appellant contended before the Appellate Authority of Advance Ruling that the supplying comprising of the two or more supplies in Composite Supply then the entire supply shall be assessed as principal supply among them and the tax liability as applicable to the principal supply shall be applied to the entire supply.

Further, they contended that the space is the principal supply in the composite supply as the sale of space constitutes the predominant element and the artwork is only ancillary and would be given complimentary that’s why these will fall under the composite supply and the rate of tax should be at the rate of 5%.

Further, the appellant relied upon the ruling passed by the Authority of Advance Ruling, Uttrakhand in Harmilap Media (P) LTD – 2022 (3) TMI 293, where the AAR held that selling of space in print media constitutes the predominant element of a composite supply and designing/ composition of the advertisement is ancillary to the said composite supply. Accordingly, the composite supply comprises of selling of space in print media and designing /composing of the advertisement will attract GST at the rate of 5% inasmuch as selling of space in print media is the principal supply which attracts GST at the rate of 5%.

The Appellate of Authority for Advance Ruling observed that as far as the HSN 998366 is concerned, the appellate activity doesn’t match with the said HSN code 998366 because the sale of advertising space in print media and is not on billboards, buildings, vehicles etc.

Further, AAAR observed that as far as the HSN code 998361 is concerned the appellant’s activity doesn’t match because the said HSN code classifies the sale of advertising space in print media and in this case the appellant’s activity is selling space and also providing design or artwork that’s the appellant question will not fall under the said HSN.

So, in this situation, the specialized services, and the nature of the service can be decided on the basis of a contract or agreement and each contract may have different activities involved. So, in this case, the appellant has not submitted any contract or agreement which states the scope or activity involved in the present case, Therefore the Appellate for Advance Ruling held that any additional work or service provided to enhance the appearance of the advertisement cannot be called as the mere sale of advertising space in print media.

The Appellate Authority for Advance ruling set aside the ruling passed by the Authority for Advance Ruling with regard to the classification of service under SAC 998366.

The Appellate Authority for Advance Ruling ruled that the service supplied by the applicant falls under “Advertising Services ‘which is having a separate SAC i.e 998361.

This article is for someone who wants to know about GST on Print Media such as Does print media advertisement attract GST? What is the GST rate for printing services? Can we claim GST input on advertisements? Is a newspaper containing advertisements exempted from service tax? and more.

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