The Indian Broadcasting Foundation (IBF) and Advertising Agencies Association of India (AAAI) arrived at a compromise in a late night meeting on May 2, 2013, following which channels have agreed to accept May 2013 ROs already received by them.
The meeting that lasted over seven hours arrived at a solution that meets the needs of broadcasters and at the same time assures agencies of their legitimate earnings. As a result, advertisers’ ads are back on air from May 3, 2013.
Commenting on the development, Arvind Sharma, President, AAAI, said, “We are happy that we have resolved the impasse. Advertisers’ spots will be back on air starting today. We ensured that both broadcasters’ and agencies’ business interests are protected. We are happy that the solution we have found will meet the needs of our member agencies in terms of their transactions with their clients.”
As is known, broadcasters, facing tax liabilities on account of non-deduction of TDS on agency commission, had stopped airing ads since the evening of May 1, 2013. This was because advertising agencies did not agree to their proposal to move to net billing. AAAI continues to maintain that the tax demands made on some broadcasters are bad in law. It has committed that it will attempt to get a circular from CBDT. A circular issued clarifies that broadcasters like other media are not required to deduct TDS from agency commission since broadcasters do not pay the agency commission.
It may be recalled that exchange4media had broken the story this morning, stating that a late night compromise had been arrived at between AAAI and IBF, following which channels have agreed to accept May 2013 ROs already received by them.
AAAI – IBF resolve impasse, ads to be back on air today