India, Economy and society

Indian Labor work a road side hoarding on June 02,2017 in Kolkata,India.The taxation process for the advertising agencies can get complicated with the implementation of a new tax regime under GST. Some even believe that the service industry can come under inflationary pressures and that it may actually make things much more complicated, particularly for advertising agencies operating in multi states because there will be a Central GST and State GST, which may increase the complexity rather than ease it,The Goods and Services Tax (GST) regime is just a few months away and the debate around its impact on various sectors is getting shrill again. Under the GST regime, the entire concept of taxing services will get changed. Seen as the biggest tax reform in India, GST will subsume most of the indirect taxes.According to Saumin Shah, CFO, Hungama Digital Media Entertainment, the implementation of a new tax order will benefit businesses across sectors and lead to more ad spends. The expected growth in Indias GDP by over 8% on the back of efficiencies coming out of GST roll out will lead to increase in advertising spends, with a greater pie for digital advertising. Businesses across sectors will be benefited on account of a single levy and better claim of Input tax credits, which may be ploughed back into advertising. Digital advertising will benefit the most in the overall advertising space as it continues to grow exponentially with massive increase in consumers on digital platforms, he said. The Finance Ministry, in a statement, has stated that services by way of admission to entertainment events or cinematography films in cinema theatres will attract 28% GST with effect from July 1. (Photo by Debajyoti Chakraborty/NurPhoto via Getty Images)