The Internet and Mobile Association of India [IAMAI] on behalf of its members from the digital advertising sector has appealed for the rationalization of GST rates for the sector at par with print advertising. This is one of the many asks raised by IAMAI on behalf of the industry before the Government.
The association stated that the GST mechanism has always been biased against the digital sector and the Association has periodically been raising this concern. In the context of digital advertising, the current GST rates are 18% for advertising and 12% for content creating and publishing on microsites.
The association has appealed the rates to be reduced to 5% to bring it par with a print medium like newspapers. The sector believes this will provide some minor stimuli to nudge advertisers to invest in brand building and work with reputed digital publishers and digital news platforms that add value to public discourse.
Dr. Subho Ray, President IAMAI stated: “While Finance Bill 2019 introduced a new restriction on Digital news platforms that reduced FDI from 100% under the automatic route to 26% to bring it at par with FDI in print, it is only fair to ask that GST rates on advertising across digital media also be brought at par with print media to provide a level playing field”.
The association also raised concerns about the very low rates under the new DAVP. The sector foresees a fall in business from the private sector given marketing budgets are expected to be slashed in the economic slowdown and the lower rates will only worsen the revenue toplines for the business.
IAMAI suggests Digital advertising spends by brands for public service campaigns on health & education to be brought under the mandatory CSR spends to encourage revenue allocations towards the advertising sector.
IAMAI also highlighted the criticality of the government especially at times of such slowdown. The association has appealed to the Government to pay out all pending dues and to strictly adhere to the 30-day credit cycle.
The association also appeals to the Government to increase its own budget allocation for digital advertising given the critical role the digital platforms are expected to play in mitigating the crisis.