Dispute between broadcasters and agencies become mirkier

Indian Broadcasting Foundation (IBF) has asked all its member channels to drop the advertisements. They have however, permitted to run ads on IPL matches.

Talks between IBF and AAAI are going on the ongoing issue of TDS deduction on agency commissions by the broadcasters.

Sources said all major networks such as STAR India, Zee Entertainment Enterprises, TV18, Viacom18, Multi Screen Media (Sony Entertainment), Times Television Network, and ETV have agreed to drop advertisements from 01 May 2013. However, a few small networks including niche channels have decided to stay out, sources added.

Broadcasters are expected to lose Rs 40-50 crore a day. While the networks have agreed to pay heed to IBF’s call to show solidarity and take a collective decision, some are questioning why IPL is kept out of the mandate.

Main issue is that broadcasters are used to issue gross bills to the agencies for TV commercials and ad spots carried by the channels. These bills include the 15 per cent agency commission, which is later deducted from the gross amount.

However, when the income tax department sent notices to IBF members for non-payment of tax deducted at source (TDS) on this 15 per cent agency commission, which shows up in the gross bills, IBF decided to issue net bills starting April.

However, AAAI opposed the move.  While numerous meetings have happened between the IBF, the AAAI, and the Indian Society of Advertisers (ISA), they have not reached a solution yet.

Source: http://cablequest.org/news/national-news/item/2408-dispute-between-broadcasters-and-agencies-become-mirkier.htmlSource: http://cablequest.org/news/national-news/item/2408-dispute-between-broadcasters-and-agencies-become-mirkier.html