MAM
TV’s 10% growth will add to AdEx growth in 2015 in India, predicts ZenithOptimedia
MUMBAI: The year 2014 saw the biggest Lok Sabha elections held in the country with Bharatiya Janta Party winning with a majority giving people a hope of ‘aache din’.
It has been just over six months of the newly elected government led by Prime Minister Narendra Modi and it seems to have captured the collective consciousness of the country. And as the year comes to an end, ZenithOptimedia’s Advertising Expenditure Forecasts says that falling food prices as well as oil prices have contributed to a reduction in the Consumer Price Inflation to a historic low of 5.52 per cent in October. IMF and World Bank have forecast an identical 6.4 per cent growth in 2015, up from 5.6 per cent in 2014. The stock market index has crossed 28000, up from 20000 in November 2013.
Hence, we enter 2015 with a strongly positive consumer and business sentiment, albeit recognising that consistent on-ground delivery and reforms will be needed to keep this sentiment up. Hence, cautious optimism, though with way more optimism than same time last year, is still the right expression.
The agency expects consumption to continue picking up, with passenger car and utility vehicle sales turning positive, credit card spending on the rise, loans for durables growing. From an ad-expenditure point of view, FMCGs will continue their dominance but given the weak monsoons, some categories might stay flat or have slow growth. High growth is expected from telecom, e-commerce, mobile phones, cars and two wheelers, retail, realty and the BFSI sector. 2015 will also be the year of ICC Cricket World Cup, which will also be a trigger to growth in ad expenditure.
And with the new TV measurement system scheduled to launch in 2015, as is the much-awaited phase III expansion of FM Radio. Regional media, across print, TV and all other media continues to drive growth in media consumption. With internet base increasing to 250 million, smartphone ownership expected to reach 200 million by 2014 end, and the country awaiting the launch of 4G services by telecom operators, online and mobile will continue to see the maximum growth rate. Digital advertising however, has become dearer as the government decided to re-impose service tax.
Given these factors ZenithOptimedia expects the ad-ex to grow by 12 per cent to Rs 40,307 crore, at an overall level in 2015, as against 10.7 per cent in 2014 (over 2013). This growth will be primarily fuelled by print at 12 per cent, TV at 10 per cent and online and mobile at 25 per cent. Other media are expected to grow between 5 – 10 per cent.
Global forecast
The year 2014 continued the trend of seeing the rise of mobile advertising and social media, and the transition to programmatic buying of digital display, will help the global advertising market grow 5-6 per cent a year over the next three years.
According to ZenithOptimedia, global ad spend will grow 4.9 per cent to reach $545 billion in 2015. The global economy is expected to improve (the IMF predicts 3.8 per cent global GDP growth in 2015, up from 3.3 per cent in 2014), but advertising faces a tough year-on-year comparison after the Winter Olympics, World Cup and US mid-term elections in 2014. Ad spend growth will therefore be slightly below 2014’s 5.1 per cent.
2016 will be a quadrennial year – with the Summer Olympics, US Presidential elections and the UEFA European Football Championship – and we expect these events to propel ad spend to 5.6 per cent growth that year, before it slips back to 5.2 ad spend in 2017 in their absence.
Brands
Jubilant FoodWorks faces Rs 47.5 crore GST demand, plans appeal
Tax authorities flag alleged misclassification of restaurant services
MUMBAI: Jubilant FoodWorks Limited has landed in a tax tussle after receiving a GST demand of Rs 47.5 crore from the office of the additional commissioner of CGST and central excise in Thane, Maharashtra.
The order, issued under the provisions of the Central Goods and Services Tax Act, 2017, relates to an alleged incorrect classification of certain services under the category of restaurant services. According to the tax authorities, this classification resulted in a short payment of goods and services tax for the period between the financial years 2019-20 and 2021-22.
The demand includes Rs 47.5 crore in GST along with an equal amount as penalty, in addition to applicable interest. The order was received by the company on March 13, 2026.
In a regulatory filing to the BSE Limited and the National Stock Exchange of India Limited, the company said it disagrees with the order and believes its arguments were not adequately considered.
The company is preparing to challenge the decision and plans to file an appeal. It added that once the redressal process is complete, the demand is likely to be dropped.
Despite the sizeable figure attached to the notice, the company said it does not expect any material impact on its financials, operations or other activities.
The disclosure was signed by Suman Hegde, EVP and chief financial officer, who confirmed that the company received the order at 19:06 IST on March 13 and has already initiated steps to contest it.
The development places the quick service restaurant major in the middle of a tax debate that could hinge on how certain restaurant-linked services are classified under GST rules. For now, the company appears ready to take the matter from the tax office to the appeals desk.
