“The new government’s maiden budget proposes to levy service tax for online and mobile advertising which we believe will adversely affect the industry’s growth. It reflects differentiated treatment as traditional print media remains unaffected with respect to the tax purview but new digital media that is actually driving innovation will have to unfortunately bear the brunt. Currently, India’s exponential mobile penetration and app consumption patterns are driving the growth of the mobile advertising industry and this development could hamper innovation efforts of the entire ecosystem comprising of mobile development start-ups, advertisers and publishers. While the budget is in favour of small scale set ups and entrepreneurs, the provision for taxation is contrary in nature for budding developers and publishers.”