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AAAI – IBF resolve impasse, ads to be back on air today

03-May-2013
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AAAI – IBF resolve impasse, ads to be back on air today

Going forward, AAAI is to approach CBDT to obtain a circular by May 31, 2013 that broadcasters need not deduct TDS against agency commission. If they succeed, then the current system of gross basis will continue.

In case such a clarification is not obtained by May 31, 2013, then all commercial discussions will take place on net value.

All ROs and billings will henceforth come with the legend, “As per established industry practise between agencies and advertisers, advertising agency will charge an amount not exceeding Rs 100000 plus taxes to the advertiser, including for the services provided by them to the advertiser”.

AAAI has also requested IBF to consider extending the date of getting the circular for CBDT for 120 days in case it doesn’t get it by May 31.

Additionally, broadcasters might send revised bills to agencies for April.

Key elements of the agreement are as follows:

1. All commercial discussions to be held at net value. Broadcaster proposal will come with the legend – “as per established industry practice between agencies and advertisers, advertising agency will charge an amount not exceeding Rs 100,000 plus taxes (this is assuming Rs 85,000 is net value of bill and Rs 100,000 is gross value of bill) to the advertiser, including for the services provided by them to the advertiser”.

2. ROs to be issued at net value. Agency RO will carry the legend “as per established industry practice between agencies and advertisers, advertising agency will charge an amount not exceeding Rs 100,000 plus taxes to the advertiser, including for the services provided by them to the advertiser”.

3.Broadcaster to issue invoices at net plus taxes with the legend – “as per established industry practice between agencies and advertisers, advertising agency will charge an amount not exceeding Rs 100,000 plus taxes to the advertiser, including for the services provided by them to the advertiser”.

Broadcasters will start advertising with gross RO (already received) for some time, but the billing will be on net basis.

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