IOAA issues circular to resolve VAT issue

The Indian Outdoor Advertising Association (IOAA) has taken another initiative to help media owners struggling with VAT based on “Purchase Orders. The association has released a circular to all leading advertising and specialist agencies which contains suggestions on how the problem can be resolved.The suggestions include, as mentioned in the Circular::
 
a) All Agencies and Media Aggregators may issue “Release Orders with immediate effect from August 01, 2013;
 
b) Such “Release Orders needs to have a condition stating as follows: “Transactions referred to in this Release Order are in nature of sale of advertising space on outdoor media only, and, does not purport to be a transfer or sale of any right or any type of asset whatsoever.
 
c) All Members are encouraged to discuss and inform this to all Agencies / Media Aggregators / Media Buyers they are currently dealing with.
 
The issue began when the Sales Tax authority demanded VAT based on “Purchase Orders which is considered as the base document for outdoor advertising transactions. However, media owners refused to accept this additional tax as all of them had been paying taxes to their respective authorities. Individually media owners from different states have been challenging in order to prevent this escalating taxation related issue and the IOAA move is expected to help them.