The Telangana Authority of Advance Ruling (AAR) ruled that Supply of artwork along with advertisement space amounts to supply of ‘Other advertisement space’ and 18% GST is payable.
The applicant, M/s Time Education Kolkata Private Limited is in the business of purchase and supply of advertisement space to the prospective customers. In the course of supply of advertisement space they are also supplying artwork to adorn the space. They are desirous of ascertaining whether supply of artwork along with the space amounts to supply of advertisement space or other service.
The applicant has sought the advance ruling on the issue whether the services supplied by the applicant can be termed as the supply of space for advertisement in print media, If yes, 5% GST can be charged on the invoices raised to the customers.
The coram of Raghu Kiran and S.V. Kasi Visweswara Rao ruled that the selling of space for advertisement in print media (SAC 998362) is taxable at the rate of 2.5% under CGST & SGST respectively. As against this the service for ‘Sale of other advertising space or time’ is enumerated as 998366 in the SAC given in the annexure to the notification. This is not specifically mentioned in the serial no. 21 of the above notification. Clearly this service will fall under item (ii) of serial no. 21 i.e., other professional, technical & business services taxable at the rate of 9% under CGST & SGST respectively.
“The applicant is supplying (2) different services and each is attracting different tariffs under this notification. Therefore the question of deducing a composite supply from the combination of drafting a design and incorporating a space does not arise. Hence where only space for advertisement and print media is supplied (SAC 998362) the rate of tax applicable is 2.5% under CGST & SGST respectively and where they are supplying ornate space it shall be treated as other advertisement space falling under item (ii) of serial no. 21 and accordingly will attract tax @9% under CGST & SGST respectively,” the AAR observed.
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