Such benefit will encourage the companies to spendmore on brand-building, which, in turn, will help the industryin this crisis period, Advertising Agencies Association ofIndia president Ashish Bhasin said on Friday.
The industry body has reached out to the governmentfor the "unprecedented disruptions" due to the coronavirusoutbreak and sent a list of suggestions to Union Minister ofInformation and Broadcasting Prakash Javadekar.
"We have sent our suggestions and the government doesnot need to dole out any money to support us. Amortisationbenefit on advertising expenses for 3 years will encourage thecompanies to spend more on brand-building and this will helpour industry to stay afloat during the crisis," he said.
He claimed the association with 110 large advertisingagencies represents 80 per cent of the industry.
"Advertising can be treated as investment or capex oreven R&D expenditure and such expenses should be allowed to beamortised for three years. Currently, it is treated as anexpense and 100 per cent of the amount has to be charged in asingle year," Bhasin told .
He also said any payment made to the agencies shouldnot have any TDS deduction going forward, since there is"unlikely to be any significant profit for the year".
"We also want money that is owed to us by way of I-Tand GST refunds, and dues from government and PSUs for ouradvertising bills to be settled immediately," Bhasin said inthe letter.
The income and cash flow of the advertising agencieshave been in "serious stress" from the last month and unlessthere is some intervention, many businesses will either filefor bankruptcy or will have to be undersized considerably,Bhasin added. BSMBDC BDC