Year 2019’s Financial budget is around the corner and not to forget it is an election year also. There is no doubt that Initiatives like ‘Digital India’, ‘Make in India’ and ‘Personal Data Protection Bills’ have certainly put India on a digital innovation fast track. But the digital agencies are still looking for solutions like dealing with global clients, High GST rates on online advertisement and more.
We talked to some of the CEOs and founders of digital marketing agencies in India and below are the pre-budget responses from them.
Faisal Amin, Media & Tech Entrepreneur (Founder of KIRA, Co-founder of Fruitbowl Digital Media)
Last year’s budget saw the introduction of GST which demanded a rapid change in pricing and procedure for both agencies and their clients. The hope is that this year, a reduction in GST rates and changes in FDI and import taxes could help make platforms and advertising more price competitive, encouraging larger and more widespread media and advertising budgets. On the other hand, a budget change in favour of the common man could potentially increase consumer spending and thus promote advertising spends in industries such as real estate, consumer goods and e-commerce.
Rajat Jain (Founder and CEO of ShootOrder)
Cut down the equalization levy of 6% which is supposed to be paid to Indian govt by media inventory owner (Facebook, Outbrain), as the liability is on service receiver’s, and agencies end up paying 6% to govt without reimbursement from Facebook and other such foreign advertiser platforms.
Taxes on online advertisement before 2013 was nill, it started with 12.36% of service tax and now with 18% of GST, if we can reduce this amount to 9% slab, it will open a big window for Indian agencies to serve foreign clients, which will not only brings in huge foreign currency in India but employment also.
Preksha Seth (Co-founder of Utopian Media)
As an agency that handles many global clients, the major challenge at hand is dealing with any change in the tax rate; specifically import and export. A slight rise in these numbers or FDI could force major corporations to restructure their budget and withdraw funds from marketing and advertising. While the challenge of new strategies and approaches is something we always love taking on, a lower budget is always a less-than-ideal constraint.
While we are hoping to not see any drastic changes this year, the 2018 budget was both a boon and bane. The new tax filing system and high GST prices caused us a lot of trouble. On the other hand, the 2018 budget encouraged corporations and companies to look at building a digital infrastructure, which in turn, helped us explore different avenues and sectors of the market. 2019 will be the year of great content and a lower GST rate would encourage clients to back that up with advertising spends, and that’s always a good thing – because who doesn’t like a good budget.