In a significant decision aimed at extending "substantial financial benefit" to the print and the electronic media in the state, finance department today ordered that GST chargeable on advertisement bills shall be paid by the government and it would be over and above the actual advertisement rate charged by the concerned media.
"GST will be calculated at the applicable rate over and above the actual rate for advertisements charged by the concerned media," said an order issued by the Principal Secretary Finance, Navin Kumar Choudhary.
It further said that Goods and Services Tax will be applicable on all advertisements regardless of originating from the government departments or the private parties.
There are presently two slabs of GST applicable for selling of advertisement space in the print media. While GST rate of 5 percent is to be charged on the official advertisements issued to the media through the Department of Information and 18 percent GST is to be charged if the advertisement agency sells the space for advertisement as an agent of the newspaper on commission basis.
According to the Commercial Taxes Department, in view of the latest order issued by the Finance Department regarding GST, the government shall have to provide additional funds to the tune of Rs 1.75 crore to the Information Department for the year 2018-19 to be reimbursed to the newspapers as GST at the rate of 5 percent, which will be over and above the Rs 35 crore advertisement budget for the said fiscal.
The government has already revised the advertisement rates of the newspapers in the state announcing considerable hike of more than 50 percent in the rates notified in 2013. The government has also increased the advertisement budget of the newspapers substantially during the past three years from Rs 22 crore in 2014-15 to Rs 35 crore for 2018-19.
Meanwhile, in a separate order issued by the Principal Secretary Finance, it has been ordered that all the government departments will issue advertisements, tenders, publicity etc, only through the Information Department. "This also includes advertisements regarding centrally sponsored schemes (CSS) and projects," it said adding that the department will be the single gateway for making payments for all official tender,/advertisements and publicity issued by the government.
According to the said order, in such CSS/Projects where the administrative cost provide for the advertisements, the concerned Department/Agency shall pass the cost of issuing advertisements to the Information Department within a timeframe of 30 days from issuance of such advertisement for onward payment to the concerned media. "Where there is no budget for issuing advertisements with the concerned department on specific project or CSS, the same will be included in the annual advertisement budget of the Information Department for making payment to the concerned media," it said.
The latest orders have been issued by the Finance Department as a follow-up to the meeting held by the finance minister with the office-bearers of the Kashmir Editors Guild (KEG) led by Fayaz Ahmad Kaloo and Editors Guild Jammu (EGJ) led by AK Sawhney here last month.
KEG and EGJ besides raising the issue of early Categorization of newspapers for implementation of the revised advertisement rates, had also sought the intervention of the Finance Minister regarding payment of GST on advertisement bills.
The minister had assured the editors that the government will expeditiously take all possible measures to address the financial and other issues confronting the newspaper industry in the state.