Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: empanelment :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: due date for vat payment :: TDS :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: VAT Audit :: Central Excise rule to resale the machines to a new company
 
 
Service Tax »
 Simplifying GST: Creating a Grand Simple Tax
 The way ahead for goods and services tax
 Goods & Service Tax (GST): Recent Clarifications
 Tax payers can see status of returns filed on GSTN portal
 Export And Import Of Goods Under GST
 The Finance Resolution And Deposit Insurance Bill, 2017
 Payment made in revenue sharing deal exempt from service tax
 India seen posting stronger growth as businesses adjust to new tax
 GST High Powered Committee On Return Filing - Representation by GST Research Foundation
  Changes In Central Goods And Services Tax Rules, 2017
 GST return filing to be a breeze for small businesses

service tax rule leaves ad agencies fuming
June, 18th 2011

A new clause under the service tax rules, slated to come into effect from July 1, has upset the Rs 20,000-crore Indian advertising industry.

The Point of Taxation Rules, first introduced during the Union Budget in February, says service tax, which was so far paid after the collection of dues from clients, would now have to be paid on the 5th or 6th of every month once the invoice for the service was raised. In other words, irrespective of whether dues were collected from clients or not, agencies would have to pay service tax.

Ad and media agencies are upset because the rule does not take into account the principle of credit. Creative agencies provide a 30-day credit period to their clients to pay their dues, while media agencies provide a 45 to 60-day window.

According to industry insiders, the earlier rule did take into account the principle of credit. It was the month following the collection of dues from clients that we paid service tax, says Nagesh Alai, president of the Advertising Agencies Association of India (AAAI), the apex body of ad agencies in India.

The government move will allow convergence of the existing rules and regulations with the Goods & Services Tax (GST), which is likely to be introduced in April 2012.

Agencies said the new rule will result in a cash flow mismatch. It is not possible to raise an invoice within 14 days as indicated by the new rule, nor is there clarity on the date of completion of service, says Alai.

So far the AAAI has made representations to the Information & Broadcasting (I&B) Ministry, the Central Board of Customs & Excise and the Finance Ministry to convince them of the issues on hand. It had also released ads last week in leading dailies in an attempt to apprise the government of its contentions with the rule. But the government is yet to get back to them.

Agency sources said the new service tax rule is unlikely to be reversed soon. If a new rule has been put in place. I dont see it being reversed easily, said Mahesh Chauhan, earlier group chief executive officer, Rediffusion Y&R and the co-founder of Salt Brand Solutions. He added, Agencies would have to be careful when raising invoices. It will bring about some discipline there.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Team

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