| Q.1 |
What is a Market Research
Agency? |
| Ans. |
"Market Research
Agency" is a commercial concern engaged in conducting market
research in any manner, in relation to any product, service
or utility, including all types of customised and syndicated
research services.
Market research includes research based services in respect
of consumer markets, industrial marketing, business to business
marketing, social and rural marketing, etc. and is based on
the requirements of the client. Such research services may be
carried out by various techniques and may take the form of brand
and advertising research. Such market research services include
studies such as, strategic research & brand positioning
development, new product development research, creating development
research, brand name, logo, pack label research, corporate image,
diagnostic market research, customer research, etc. Therefore,
the market research services are of a very diverse nature and
of a very wide variety. |
| Q.2 |
What is the taxable
service in case of services provided by a Market Research Agency? |
| Ans.
|
Taxable service means
any service provided to a client, by a market research agency
in relation to market research of any product, service or utility,
in any manner. |
| Q.3 |
What is the value
of the taxable service in case of services provided by Market
Research Agency? |
Ans.
|
Value of the taxable
service in relation to the service provided by a market research
agency to a client, is the gross amount charged by such agency
from the client for services rendered in connection with market
research of any product, service or utility in any manner. |
Q.4
|
Whether the Service
tax is payable by the market research agencies on services rendered
to the advertising agencies who has subcontracted the work to
them? |
Ans.
|
Yes, in the case where
a market research agency is providing the service to the advertising
agencies, who have commissioned its services on behalf of the
client, the market research agency would be required to pay
service tax on services rendered by it to an advertising agency.
The advertising agency would also liable to pay service tax
on the amount billed to its client, but for advertising services. |
| Q.5 |
Is service tax payable
on the reimbursable/out-of-pocket expenses charged to the client
on actual basis? |
| Ans.
|
No. The charges billed
to the client by Market Research Agency on account of out of
pocket expenses which are reimbursable on actual basis, such
as, travelling, boarding and lodging expenses are not subject
to service tax. In this respect, the service tax assessee may
be required by the jurisdictional officers to provide documentary
evidence substantiating his claim for abatement from the gross
amount received from the client for services rendered. |
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