NBA requests FM to remove 18% GST on advertisements

In a new development, the News Broadcasters Association (NBA) has requested Finance Minister Nirmala Sitharaman for the removal of 18% GST on advertisements on broadcast media and bring it in  par with the print media industry at 5%.

NBA in its letter to the minister said that while the news broadcasters are coping with the financial problems of recovery of dues, they are also faced with serious problems of advertising inventory/ release orders being cancelled and inventory bookings being more than 50% for even the top-rated news channels. 

“In these trying circumstances, as part of the stimulus package, we request you to kindly remove the 18% GST on advertisements or reduce it and bring it in  par with the print media industry i.e. at 5%”, the letter said.

Here is the full draft of the letter:

The News Broadcasters Association (NBA) appreciates the proactive steps being taken by the government to protect its citizens and the economy from the adverse impact due to the spread of Covid-19 pandemic. NBA is confident that the Economic Response Task Force under your dynamic leadership will combat the impact of pandemic covid-19 on India's economy and the economy will sooner  than later resume its potential growth trajectory.

NBA stands in complete solidarity with the government and extends its wholehearted support, to help the nation and overcome its adverse impact and come out victorious by defeating the Covid-19 virus.

To ensure social distancing from spread of the virus and for ensuring the safety of the editorial personnel, the news broadcasters has had to take various steps /make alternate arrangements within and outside the premises for news gathering/ reporting purposes. This has resulted in the operating costs of news broadcasters during the current pandemic/lockdown having gone up exponentially.

You will appreciate that advertisements are an integral and essential part of the business and the main source of  revenue for the news broadcasters which has come under severe pressure during this pandemic/lock down. Advertising agencies are putting huge pressure to defer the payments to broadcasters and to allow more time over and above the 60 days credit period; the recovery of bills is going to be hugely challenging, while facing an even bigger task of almost zero or negligible income in the next 30-90 days. While the news broadcasters are coping with the financial problems of recovery of dues, we are also faced with serious problems of advertising inventory/ release orders being cancelled and inventory bookings being than 50 percent for even the top-rated news channels. Poor recovery and lack of future income would mean that the news broadcasters would have to weather the storm for two /three quarters and hope for a partial recovery towards the end of  the financial year.

In these trying circumstances, as part of the stimulus package, we request you to kindly remove the 18% GST on advertisements or reduce it and bring it in  par with the print media industry i.e. at 5%.