Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: form 3cd :: articles on VAT and GST in India :: due date for vat payment :: VAT RATES :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS
 
 
« Service Tax »
 GST to result in price reduction for consumers: Hasmukh Adhia
 Bill gives free hand to CAG to audit GST operation
 Lok Sabha to discuss GST bills on Wednesday
 GST to strengthen organised logistics companies
 No need for Parliament nod to waive property tax in Delhi
 CBEC to be renamed, reorganised for GST regime
  GST debate now continues on categorisation of products
 GST coming soon, but don’t expect quick benefits; rich valuation to stall stocks
 FM Arun Jaitley underlines urgency to pass GST bills in this Parliament session
 Government may table 4 GST bills in Parliament today
 Applicability Of Gst Law On Educational Institutions

Ad agencies versus govt: War on service tax deadline
June, 09th 2011

The advertising industry has hit out against the government. An advertisement in major newspapers appealed against the new rule that compels agencies to pay service tax before payment is received, reports CNBC-TV18's Nikita Rana.

As per the rule, the deadline for ad companies to pay service tax on each clients media spends is the fifth or sixth day of the month. However, ad agencies say that it takes more than 60 days to receive payment from the advertiser. So they will now have to pay the tax from their own pockets.

Nagesh Alai, president of AAI said, There will be a mismanagement of cash flows. Now, we are expected to pay before payment is received. For this, we will have to raise loan. Interest rates are high these days. Also, an agency cannot raise an invoice in the stipulated period of time, because it's not possible to gather information and bills of different media within two weeks. There are lots of lacunas; hence, it's not workable and the definition is not clear.

Agencies also worry that the rule will mean a change in the established cash-flow and billing structures. This is likely to affect the way advertisers operate as well. Sam Balsara, chairman, Madison Media said, If the government doesn't relent, we will have to go to our clients, advertisers and ask them to pay our service tax in advance.

Margins have always been an issue for advertising and media agencies. The new rule will add pressure to margins because any loan they take to pay service tax will have an added interest cost.

However, the industry is not united on the issue. Some agencies feel that service tax has to be paid only on the 3-5% upfront payment they receive from advertisers. One can say the industry will remain on tenterhooks until government issues clarity.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multi-level Marketing MLM India Affiliate Marketing Affiliate Marketing Software MLM Software MLM Solutions Multi level marketing solutions MLM Servi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions