Home » Business » Broadcasters-ad agencies spat over billing continues
The issue isn’t new.
This time, the trigger was a series of tax notices to broadcasters such as STAR Group and Zee Network.
The notices from the income tax authorities demanded the media owners concerned pay tax deducted at source on the 15 per cent commission paid to ad agencies as remuneration.
What angered the channels was the fact that the commission wasn’t actually paid; it is deducted by the ad agency from the client payments.
Agencies then pay this net amount to broadcasters for running the client’s ads on their channels.
However, the case is a little different on paper. Broadcasters issue an invoice not for the net amount paid to them but the gross amount (the original amount paid by the client to the ad agency).
The ad agency’s remuneration is shown as a deduction on this bill.
Broadcasters want to do away with the practice of gross billings, as income tax authorities seem to be holding them responsible for payment of TDS on agency commission.
As a resolution, broadcasters have proposed net billing. However, agencies are opposed to this.
They claim
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