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Passions: Tedious TDS
How will the new TDS rule on freebies impact content creators? An influencer marketer and manager debate
“This will build a trust in creators among their audiences”
By Vivek Ahuja
With this new addition, ethical advertising will definitely start taking shape again. This move not only regulates and validates the creator economy, but also will help add a layer of authenticity to brand promotions. Creators will start promoting products that they strongly believe in and use themselves, rather than just post a story or give shoutouts as an obligation in return for a PR package. They will need to carefully pick and choose what brands align with their core values and fit their image ecosystem. This will actually benefit creators by building a strong trust factor and accountability with their audiences, and give them a long retainer with brands rather than push them to blindly jump to the next PR collaboration. It’s a win for brands as well because they’ll be able to find authentic brand ambassadors who are actual users of the products they endorse.
For micro and nano creators who are just starting out with their journey, while this may seem like a setback since the majority of their collaborations are structured as barters with brands, this also is an opportunity for them to reassess and push for monetary compensation for the services they render, making it a fair exchange.
Vivek Ahuja is an artist manager & content strategist and heads an audio production company.
“The TDS rule will impact travel and tech creators the most”
By Neel Gogia
Having worked in this industry for so long, I believe the new TDS rule will not have a positive impact, especially for nano or micro-influencers. They are largely dependent on barter deals to showcase their work to potential brands and their followers. The tax will, hence, impact their wallets.
The process now essentially involves brands having to pay
10 per cent TDS on the value of the barter, thus mapping that value to the creators’ PAN cards, which means the value will be added to the creators’ income. For instance, if you as a creator get a gadget worth ₹1 lakh, that ₹1 lakh will be added to your income and you’ll pay tax on it.
This will impact travel and tech influencers the most, since the new TDS rule is only applicable when the total value of the benefits provided during the financial year exceeds ₹20,000.
As an influencer marketing agency, we believe that with TDS, the process of monetisation and influencer marketing overall will become cumbersome for influencers, agencies, and brands, especially small businesses. Our recommendations for budding creators include a nominal fee for an association that can help them pay off the TDS. We will shed more light on this once there are more details on the rule.
Neel Gogia is the co-founder ofIPLIX Media.
From HT Brunch, July 2, 2022
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