IBF and AAAI resolve the billing deadlock; Ads back on TV

The advertisements on television were pulled off by IBF starting May 1, following the tussle between the IBF and AAAI on the billing issue. The two organisations met on Thursday, May 2 to resolve the issue.

Broadcasters, facing tax liabilities on account of non-deduction of TDS on agency commission, had stopped airing ads. This was because advertising agencies did not agree to their proposal to move to net billing. AAAI continues to maintain that the tax demands made on some broadcasters are bad in law. It has committed that it will attempt to get a circular from Central Board of Direct Taxes (CBDT). A circular that clarifies that broadcasters like other media are not required to deduct TDS from agency commission since broadcasters do not pay the agency commission.

In a meeting that lasted over seven hours, representatives from Indian Broadcasting Foundation (IBF) and Advertising Agencies Association of India (AAAI) last night arrived at an elegant solution that meets the needs of broadcasters and at the same time assures agencies of their legitimate earnings. As a result, advertisers' ads will be back on air starting May 3rd.

Says Arvind Sharma, President AAAI, "We are happy that we have resolved the impasse. Advertisers' spots will be back on air starting today. We ensured that both broadcasters' and agencies' business interests are protected. We are happy that the solution we have found will meet the needs of our member agencies in terms of their transactions with their clients."