Service tax probe not to hit ad agencies, say clients

As the service tax department is probing the evasion of service tax on bulk discounts offered by the print media to advertising agencies, the large advertisers are confident that their advertising agencies will come out clean.

While department officials maintained that they were in the process of issuing notices to various media agencies, major advertisers told Business Standard that they had confidence in their agencies.

Take the case of Godrej Consumer Products which is among the top fifty spenders in advertising (listed companies).

A spokesperson from Godrej consumer products said, "We have a AOR system and every time an advertisement is released, the company is aware of the rates charged."

She further added that the company trusted the media agency as they have dealing with them since years.