Ad agencies have voiced concerns over the five per cent GST being imposed on advertising services in newspapers, and the complicated nature of the new indirect tax regime.

At a ‘GST Talk’, organised by The Hindu and BusinessLine in association with the Kerala Management Association in Kochi, representatives of advertising agencies put their queries to Pullela Nageswara Rao, Chief Commissioner of Customs and Central Taxes and K Harish, Deputy Director, GST Intelligence.

Allaying their fears, many of them over billing, the officials pointed out that the new tax structure would be a game changer.

It is too early to discuss the demerits of GST implementation, Harish told the gathering.

“Many of you still have doubts about the tax acts introduced decades ago. All tax laws have nuances and [there is] difficulty in getting clarifications. But the GST Act is only 48 days old and it is expected to take at least 6-7 months for clarity,” he said.

“It is wrong to assume that new tax structure would fleece the trade,” Harish said.

Many participants raised fears that the clients may end up spending more with agencies.

Harish also suggested a few models, which included the “pure agency” model (with just five per cent tax) wherein the agency only is engaged in selling space in the newspaper; and the model of having separate invoices for space selling and creative inputs, which attracts 18 per cent tax.

As the time for GST payments and filing of returns begins shortly, the Chief Commissioner said the department had taken all steps to sort out the problems of the trade through live demonstrations at its headquarters on August 23.

Nambi Rajan Narayanan, Chief Financial Officer and Company Secretary, The Hindu Group, CS Suresh, AVP (Commercial), The Hindu , and Vivek Krishna Govind, KMA president also spoke.

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