Page 93 - CA Final GST

Badlani Classes

such supplies are part of any composite supply, the rate applicable for the principal
supply shall apply.

Que. XYZ Advertising agency enters into following three transactions-
1- XYZ buys a unit of space worth `10,000 from newspaper for `8,500/- [after a trade
discount of `1500/-] and sells the same unit of space to client Mr. P at `10,000/-
2- XYZ sells unit of space to the client Mr. Q not on its own account but on account of
newspaper for `10,000/- and receives commission of `1500/- for such sale from the
newspaper.
3- XYZ recovers charges `2,000(total) towards design charges.
GST on advertisement in print media is 5%, while in other cases, it is 18%
Ans. Computation of GST liability
Particulars Tax `
Sale of space for advertisement in newspaper [ 10,000 x 5% tax from Mr. 75
P] 500
Less: Input tax credit on purchase of space from newspaper [8,500 x 5%
tax] 425
Commission on newspaper Advertisement [1,500x18% GST] 270
Design Charges are liable to GST [2,000X18%] 360
705

Que. HP Advertising agency provided the following services (`):
Sale of space for advertisement in newspaper 45,000
Services related to preparation of advertisement 85,000
Sale of time for advertisement to be broadcast on FM Radio 65,000
Advertisement via banner at public places 50,000
Sale of time for advertisement to be broadcast on TV Channel 1,00,000
Aerial bill-boards 90,000
Canvassing advertisement for publishing on a commission basis 35,000
Compute the GST liability of HP Advertising agency. All charges are exclusive of
taxes. GST on advertisement in print media is 5%, while in other cases, it is 18%.
Ans. The value of taxable services and GST thereon is as follows-
Particulars Value Rate Tax
Sale of space for advertisement in newspaper-Print 45,000 5% 2,250
media
Services related to preparation of advertisement-Not 85,000 18% 15,300
print media; taxable
Sale of time for advertisement to be broadcast on FM 65,000 18% 11,700
Radio-Not print media
Advertisement via banner at public places- Not print 50,000 18% 9,000
media; taxable
Sale of time for advertisement to be broadcast on TV 100,000 18% 18,000
– Not print media; taxable
Aerial bill-boards-Not print media; taxable 90,000 18% 16,200
Canvassing advertisement for publishing on 35,000 18% 6,300
commission basis – Taxable
Total 4,70,000 78,750 Page92

Central Goods & Services Tax Act, 2017