AAAI reaches out to Government for business continuity

With the economy reeling under the impact of the ongoing COVID-19 crisis, Ashish Bhasin, President, Advertising Agencies Association of India (AAAI) has sent a detailed set of recommendations on behalf of the members of AAAI to Union Minister of Information & Broadcasting Prakash Javadekar. In this he has stressed the importance of advertising industry for the accelerated revival of the economy. 

In a statement issued, it was pointed out how the nationwide lockdown to check the spread of the pandemic has come at a huge economic cost. “The Advertising Agency business, like many other businesses, has been seriously affected. The bulk of the agency’s costs are fixed in nature, be it Salaries, Rent, Electricity, Communication, Upkeep, Media Audience measurement reports, etc. The income and cash flow has been in serious stress in the last month and unless there is some intervention, many businesses will either file for bankruptcy or will have to undersize considerably,” the statement added. 

AAAI acknowledged the move by INS and IBF, the media associations representing the interest of Print and TV respectively, to permit AAAI members to pay monies they have collected from their clients and not insist on what is due to them on the due dates. “But the continuity of the agencies business cannot be for long without the help of the Government of India,” the statement insisted. 

Bhasin said, “What we have asked the Government is very reasonable. We want principally money that is owed to us by way of IT & GST refunds, and dues from Government & PSUs for our advertising bills to be settled immediately. We have also said that any payment made to us should not suffer any TDS deduction going forward, since there is unlikely to be any significant profit for the year. Further, we have sought a direction to banks and our debtors that they provide the much needed cashflow to pay salaries and meet other essential expenses, etc.” 

He maintained that these measures would not lead to any revenue loss to the Government and affirmed that the timely help they will provide actually is the help they are providing to the people of India, since advertising is a critical input that can provide a ripple effect in reviving many sectors of the economy. 

One other recommendation made is to treat advertising expenses as an investment and have this cost amortised over the next three years. AAAI believes this will encourage larger advertising outlay, which will help revive the economy faster. In the same vein, AAAI also suggested that advertising expenses could be given weighted deduction while computing taxes. The suggestion was that every Rs 100 spent on advertising, should be treated as Rs 200, while computing the taxable income. 

AAAI urged the Government to look at the requests made with full earnest and urgency.


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