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TMI Blog2023 (7) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission received from the print media. In the case of GREY WORLDWIDE (I) PVT LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI [ 2014 (9) TMI 180 - CESTAT MUMBAI] it is held it can be seen that the Tribunal has been consistently taking the stand that incentives received by an advertising agency from the media without any contractual obligation to render any service cannot be levied to Service Tax under the category of BAS. The amount of incentive received by the Advertising Agency from the print media has been under litigation and the Tribunals have been consistently holding that such incentives or discounts cannot be termed as Business Auxiliary Service. On going through the case law relied upon by the Revenue, MALAR PUBLICATIONS LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2018 (1) TMI 1058 - CESTAT CHENNAI] ), it is seen that the facts are different. There the Appellants were canvassing advertisements for the publications like Daily Thanthi, Rani Weekly etc., and were getting fixed retainership fee for their work. Therefore, the decision arrived at by the Tribunal in the case of Malar Publications Ltd is distinguishable and cannot be applied to the facts of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is paying charges to the print media and subsequently gets paid by their clients. In this process, the print media while raising the invoices on the Appellant gives him a discount of 10%-15%. The Department has initially in 1989-1999 to 1999-2000 taken the view that the activity undertaken by them is on account of advertising agency services only. He submits that in terms of Section 65(105)(zzzm), when sale of space for advertisement in print media is involved, the same is exempt from payment of Service Tax. As their activity squarely pertains to such sale of space in the print media, per se, their service is fully exempt from payment of Service Tax. The Department purely in order to overcome the exemption granted for Advertising services, has taken a new stand in 2004 on the count that the services provided by the Appellant amounts to Business Auxiliary Services . In this case, he submits that their client is only the Government of Andhra Pradesh or other clients who are actually getting their advertisements published through the Appellant. He submits that the print media like newspapers have not entered into any Contract/Agreement with the Appellant specifying that on pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in all these cases, the issue involved is that of booking of advertising space in print media. The Tribunals have been consistently holding that the activity will not fall under the category of Business Auxiliary Services and have allowed the Appeals filed by the Appellants. Accordingly, he prays that the Appeals may be allowed. 4. The learned AR submits that the services provided by the Appellant are in the nature of Business Auxiliary Services only. The Appellant is acting as an agent of the print media and the discount given by the print media in their invoices is the commission amount received by the Appellant. While there may not be any direct Agreement/Contract between the Appellant and the print media, by way of being a member of the Indian Newspaper Society, the Appellant gets the concession of lower rate for the advertisements provided in by them for publication in the newspapers. So far as changing of the stand by the Department from their initial classification of the service under advertising agency services to present Business Auxiliary Services, he submits that the Appellant is not providing the advertising services because the matter for advertisement is prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n received from the print media. 7. Coming to the case law cited by the Appellant in EURO RSCG Advertising Ltd (cited supra), the Tribunal has held as under: 2. The appellants provide advertising services to their various clients. In order to provide the above services, they in turn, get in touch with media for booking of time slot on various satellite channels to their clients. As per industry practice, the Broadcasting agency provides 15% discount from their Tariff rate to the appellants In the present case, a person or an organization who wants to advertise their product approaches an advertising agency. Therefore such a person/organiz-ation who wants to avail the services of advertising agency becomes the client of the advertising agency. The advertisement can be done in various ways either through Print Media or through Radio or Television, etc. in order to fulfill the requirements of his client the advertising agency which is the service provider gets in touch with the appropriate media. In other words as far as the advertising agency is concerned, its client is not the media. In order to provide advertising services the advertising agency charges certain amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le service and it was not a commission. The same facts are seen in the present case and prays for allowing the appeal. 6. On a careful consideration, I notice that the facts in the present case are identical to the one decided by the Division Bench in the case of M/s. Euro RSCG Advertising Ltd. and M/s. Marketing Consultants Agencies Ltd. v. CST by Final Order Nos. 60 61/2007 [2007 (7) S.T.R. 277 (Tribunal)] Respectfully following the ratio of the above noted judgment, the impugned order is set aside and appeal allowed with consequential relief, if any. [Emphasis Supplied] 7. In the case of McCann Erickson (India) Pvt Ltd (cited supra), it is held as under: 2. The appellants render taxable service under the category of advertising agency service . They entered into contract with their clients for providing advertisement agency service. The appellants render advertising services to various clients in the form of creative agency wherein they create advertisement by themselves or their third party media agency wherein they do media printing and/or buying for advertisement to be published in print/electronic media. They were receiving 15% agency commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service provided by the appellant is not an advertising agency service. According to the Revenue, the scope of the service extends not only to any service connected with advertisement but also any service connected with display or exhibition of advertisement. However, we find that the master circular issued by the Board itself is against the Revenue and the service provided by the appellants is admittedly only in respect of booking the space or time. We agree with the learned Commissioner (Appeals) that the master circular covers the case of the appellants and therefore the Revenue s appeal about classification cannot be accepted. 5. Another point which Commissioner (Appeals) has decided in favour of the appellants is that the Service tax liability arises only on the actual amount collected by the appellants and not on the full discount received by them from advertising agency, from the newspaper or the media. The very same issue had come up before the Tribunal in the case of Mccann Erickson India Pvt. Ltd. reported in 2008 (10) S.T.R. 365 (Tri.-Bang.) and also Euro RSCH Advertising Ltd. v. C.C.S.T., Bangalore reported in 2007 (7) S.T.R. 277 (Tri. -Bang.). In both the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attract Service Tax as advertising agency service. [Emphasis Supplied] 10. In the case of Grey Worldwide (I) Pvt Ltd (cited supra), it is held as under: 4.1 From the nature of the transactions undertaken in the present case, it is seen that the appellant is rendering advertising agency services to various clients who are the advertisers. On behalf of these advertisers, the appellant has placed advertisements in the print/electronic media. The choice of the print/electronic media is with the advertiser and not with the advertising agency, who merely co-ordinates between the media and the advertiser. On the agency commission received, they have discharged Service Tax liability. Similarly, the electronic media also discharges Service Tax liability on the consideration received for broadcasting which includes incentives, if any, to be paid. Thereafter, at the end of the year, depending upon the volume of business given by the advertising agency, the media gives certain incentives by way of volume discounts/rate difference. There is no agreement or understanding or any contract between the advertising agency and the media for promotion of the media s business activities. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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