AAAI requests for extension till June to get circular from CBDT

The billing war between the AAAI and IBF hasn't come to an end, despite the May 31 deadline.

The Advertising Agencies Association of India (AAAI) has requested the Indian Broadcasting Foundation (IBF) for an extension till June 28, in relation to the CBDT circular that it had attempted to obtain with respect to the net billing issue.

On May 3, a press statement from AAAI stated that the organisation continues to maintain that the tax demands made on some broadcasters are bad in law. It also said that AAAI would attempt to get a circular from the CBDT, clarifying that broadcasters like other media are not required to deduct TDS from agency commission since broadcasters do not pay commission to the agency. However, AAAI has failed to obtain this circular until May, 31.

Arvind Sharma, president, AAAI, and, chairman and CEO, Indian sub-continent, Leo Burnett, tells afaqs! that the AAAI has not managed to get the CBDT circular yet. "It will take some more time for the documentation to take place but as of now the amounts will be net with a mention of gross amount as well. We have requested for an extension till June 28. Meanwhile, we have requested IBF that if a circular were to come by June 28, they were to look at the circular and revert to the gross billing system," Sharma adds.

Nagesh Alai, ex-president of AAAI, and, group chairman, India, Draftfcb Ulka, says, "The informal talks with the IBF are going on and it is critical dealing with the government on this. Hence, it is taking some more time. We had, however, agreed to the dispatch off the net bills from June 1. By end of this month, we should be able to get the circular from CBDT."

Meanwhile, IBF secretary Shailesh Shah says that the board is still considering the request for extension till June 28 and will get back to AAAI soon. This doesn't change the fact that the broadcasters have switched to net billing. "We had, earlier, given AAAI time till May, 31, but we also agreed that if it fails to get the circular by then, we will release net bills from June 1; the bills will be for the month of May, which we had held back."

The issue of net billing versus gross billing came into light when the tax authorities sent out notices to a few broadcasters in April, asking them to pay TDS on the gross amount. Reacting to the notices, the broadcasters insisted to move to net billing, a move which AAAI refused to accept earlier.