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The Internet and Mobile Association of India (IAMAI) on behalf of their members, has appealed for rationalisation of GST rates for the sector at par with print advertising. The association said that the GST mechanism has always been biased against the digital sector. In the context of digital advertising, the current GST rates is 18% for advertising and 12% for content creating and publishing on microsites.
IAMAI has appealed the rates to be reduced to 5% to bring it par with print medium for instance newspapers. The sector believes this will provide some relief to advertisers in brand building and work with reputed digital publishers and newsplatforms.
Finance Bill 2019 had 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. Thus, 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 (Directorate of Advertising and Visual Publicity).
IAMAI also suggested that digital advertising spends by brands for public service campaigns on health and education to be brought under the mandatory CSR spends to encourage revenue allocations towards the advertising sector. It is also highlighted the criticality of the government especially at times of such lockdown situation. The association has appealed to the government to pay out all pending dues and to strictly adhere to the 30-day credit cycle.