Broadcasters to send off net bills; AAAI reluctant to accept

MUMBAI: The curtains are slated to go down on a very long-standing practice in the media industry tonight. Sources in the broadcasting fraternity reveal that net bills will be dispatched to media agencies for television commercials carried on channels. These will replace the gross bills which used to be the norm.

This move comes following an Indian Broadcasting Foundation (IBF) decision on the matter. A month or so back, certain broadcasters received notices from the income tax department on gross bills not having a deduction of TDS on agency commissions. The IBF then decided to move over to the net billing system from the first billing cycle of April, something which the Advertising Agencies Association of India (AAAI) opposed. The IBF then told its members to defer the dispatch for another week to allow the IBF, the AAAI and the Indian Society of Advertisers (ISA) to hammer out a solution. Somehow, the three could not meet last week.

And the IBF sent out another circular on Friday (19 April), advising its members to send out net bills on 22 April.

"IBF‘s circulars are always in advisory form. After consultation with some more tax experts, the IBF has told us to dispatch the net bills tonight," said the chief financial officer of a leading broadcast company.

While broadcasters have already decided to go ahead with the issuance of net bills on 22 April, AAAI appeared to be oblivious to this development when telephoned its president and Leo Burnett chairman & CEO Indian subcontinent Arvind Sharma. He pointed out that there has been no communication from the IBF that broadcaster members would be dispatching net bills tonight. "I hope it is not true. If they were to dispatch the net bills tonight, we will be constrained to send them back," he said.

"We at AAAI as well as our clients represented by ISA understand the challenges faced by the broadcasters and that is why we had proposed a joint association meeting on 23 April. The IBF, however informed us that it would not be possible to have it on that day. We still believe that if the three associations put their heads together along with some expert tax consultants, a win-win answer for all can be formed. We would urge IBF to come for such a joint meeting," Sharma added.

Obviously, the industry has not seen the last of the net vs gross billing issue.

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