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Budget 2017 - Need to reduce service tax on advertising: Ashish Bhasin

31 Jan 2017

The advertising industry has had a good run in 2016, with a projected growth of 15.5 per cent, making India one of the fastest growing advertising markets globally. The advertising industry is looking for a growth-oriented Budget this year as well and put the woes of demonetisation behind it.

Service tax of 15 per cent remains a cause of concern for the industry, which is looking for easing of the tax regime.

Ashish Bhasin, Chairman & CEO South Asia - Dentsu Aegis Network, remarked, “A Union Budget that is growth-oriented and puts more money in the pocket of the common man will benefit the advertising industry. Research has shown that as a rule of thumb, every percentage point added to the GDP growth adds 1.5-2 per cent points to the advertising industry’s growth. So, I do hope that this will be a growth-oriented budget, which in turn spurs economic growth all around in India, particularly in the rural areas.”

He further said that the advertising industry didn’t mind paying legitimate taxes, but also pointed out that the on-ground implementation and the complexities of the taxation system caused huge amounts of productive time to be wasted in unproductive red tape. “In that context, any simplification of the taxation processes, both in the Direct and in the Indirect Tax areas, will be very welcome,” he maintained. 

Bhasin observed, “Even GST, which was supposed to simplify indirect taxation, is likely to inadvertently make it much more tedious for the services sector. The Government needs to address this urgently.”

While stressing that the service tax on advertising was already very high at 15 per cent, including surcharges, Bhasin hoped that particularly given the slowdown caused by demonetisation, the Finance Minister would consider not taking it up any further and reducing it, if possible.