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| indiantelevision.com's Media, Advertising &
Marketing Watch |
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| Big broadcasters united on 5% service
tax for all ROs |
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The Indiantelevision.com
Team
(7 September 2002 9:15 pm) |
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MUMBAI: What exactly is the situation
as far as the contentious 5 per cent service tax on ad billings go?
The general assumption going round appears to be that the broadcasters
have had to give way in the face of strong resistance from FMCG behemoth
Hindustan Lever (HLL) on the issue. However, all the three big broadcasters
Star, Sony Entertainment and Zee TV have been quite clear that this
surcharge must be factored into the final tally and billed separately,
the details as to how it is to be done being left to negotiation.
A lot of confusion has been raised around this due to a report which
first appeared on a media website and Sony has "very categorically
clarified that from 1 September, every advertiser on its network has
been showing the 5 per cent service tax component separately in the
release order (RO)."
Currently, the big FMCG companies advertising on the Sony network
like HLL, Procter & Gamble and Nestle are all showing the 5 per cent
separately in their billing instructions on the ROs, sources say.
And still off air on Sony because they are yet to accede to the demand
on separate billing for service tax and led by Colgate are Coke, Pepsi,
Marico and Johnson & Johnson.
Star India ad sales head Raj Nayak said as much when he spoke to indiantelevision.com
yesterday: "All clients have agreed to pay (the service tax) and will
be on air as soon as we can put them on." Referring to HLL, Nayak
said: "Star does not have a signed deal with HLL and will negotiate
with them to pay service tax when a new deal is done. We stand firm
that we will follow the IBF-ISA-3AAAs-of-I agreement to air only spots
of clients who pay service tax."
Star's old agreement with HLL has expired and negotiations are currently
on with it for a new deal.
HLL's annual TV ad spend is streets ahead of any other advertiser
at Rs 1.5 billion. On Star TV alone that works out to Rs 2 million
every day, reports have said.
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Star
to put HLL ads back on air
Sony,
Zee blink on service tax issue, Star stands firm
Lever,
Colgate ads off air on main satellite channels over service tax
issue
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