Advertisers, broadcasters join forces

advertisers and broadcasters have decided to lobby jointly with the finance ministry for the removal of the service tax, though they remained divided on the issue of who will bear the burden of the tax if it stays. at a meeting of the representatives from the broadcasting industry, advertising agencies and advertisers in mumbai on tuesday, the issue of the five per cent service tax continued to create a rift. the broadcasting industry, represented by indian broadcasting foundation, held that the service tax, being indirect in nature, would have to be borne by the end-user, namely the advertiser. the advertising community, indian society of advertisers and association of advertising agencies of india, contended that the extra burden would add to its costs and have an adverse impact on the advertisement spend of the industry. however, following the tuesday meeting, the industry bodies decided to join hands on the issue of impressing on the government the adverse impact of the tax on the broadcasting and advertising industry. a joint memorandum on the issue would soon be submitted to the finance minister, industry sources said. we would appeal to the government to remove the tax in the next financial year, said a representative of broadcasting industry who attended tuesday's meeting. for the current year, the broadcasters would pay the tax and pass it on to the advertisers. however, in the event of the advertiser not footing the bill, broadcasters may have to increase advertising rates to factor in the tax, industry analysts said. advertisers have maintained that in the event of the advertiser picking the tab, the move may lead to reduction in ad spend over the year. with a slowdown in the industry, the advertising spend this year may eventually remain flat, pointed out an executive from a leading fmcg company. media analysts feel that given the soft advertising market and general lull in business environment, the way forward could be both the industries sharing the burden of the tax between themselves. the television advertising market in india is currently pegged at around rs 3,500 crore on an annual basis. a five-per cent tax would help the government garner around rs 175 crore in revenue. taxation on broadcasting services is part of sixteen new services brought under the ambit of the service tax net in this year's budget. the tax became effective from july this year. the broadcasting industry has been trying to impress upon the government the adverse impacts of the tax. various industry associations including ficci and cii have also opposed the tax. removal of the service tax is high on the pre-budget wishlist of the broadcasting industry this year.

Advertisers, broadcasters join forces

<img src=/photo.cms?msid=81659835 align=left border=1>ADVERTISERS and broadcasters have decided to lobby jointly with the finance ministry for the removal of the service tax, though they are divided on the issue of who will bear the burden of the ...

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