Digital advertising appeals to GST rate parity to avoid current crisis: IAMAI

NEW DELHI: The Indian Internet and Mobile Association (IAMAI) on behalf of its members of the digital sector has called for the rationalization of GST rates for the sector on par with advertising.

The association alleged that the GST mechanism has always been biased against the digital sector and it has periodically been raising the concern. In the context of digital advertising, the current GST rates are 18% for advertising and 12% for content creating and publishing on microsites.

IAMAI has appealed for tariffs to be reduced to 5% to match it with print media, for example newspapers. The industry believes that this will provide some relief to advertisers in brand building and will work with prestigious publishers and digital platforms.

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 expressed concern about very low rates under the new Directorate of Advertising and Visual Advertising (DAVP).

IAMAI also suggested that brands' digital advertising expenditures for public service campaigns in health and education be included in mandatory expenditures to encourage revenue allocations to the advertising sector.

He also highlighted the government's criticism, especially at times of such slowdown. The association has asked the government to pay all outstanding fees and strictly adhere to the 30-day credit cycle.

IAMAI further requested the government to increase its own budget allocation for digital advertising to mitigate the current crisis due to Covid-19.