Boost entertainment industry: CII
By Our Convergence Bureau | 07 Jan 2002
CII has suggested that the service tax levied on television broadcasters should be removed and in case this is not possible, an abatement of 50 per cent should be given.
According to CII, the media and the entertainment industry could help the government to address certain national concerns such as education and literacy programmes. To encourage private channels to promote public service broadcasting, CII feels all contributions to and expenditure on public service broadcasters, covering the areas of education, HIV/Aids should be exempted from income tax.
CII has recommended that the customs duties on content creation software like digital camcorders, digital video and tape-recorders, digital video tapes, recorders and video monitors, which currently ranges in the level of 51 to 63 per cent, should be brought down to zero for the next five years.
CII has pointed out that once the TDS rates are determined, it should be valid for two years. Any changes required should be made one year in advance or in the first month of the fiscal year related to the assessment year. At present the TDS rates for channels are determined on a year-to-year basis.
CII has pointed out that the excise duty levied in audio CDs has lead to a closure of audio and video CD production units, causing a hardship to all manufacturers and companies. With regard to the music industry, CII has suggested that all recorded CDs should be exempted from excise duty and in case this is not possible, a flat rate of excise duty of Rs 4 to Rs 5 should be levied on CDs.
According to CII, the domestic music and entertainment industry is being impacted by large-scale piracy. The film industry loses around Rs 400 crore annually to piracy and 40 per cent of the music market is captured by it. CII has suggested that initiatives have to be taken to curb piracy and an anti-piracy fund should be set up and all contributions to such funds should be exempted from income tax.
The confederation has further recommended that 1 per cent of service tax collections from the entertainment and media industry may be utilised to set up a dedicated anti-piracy fund. CII has stated that a small group should be constituted to regulate the availability of MP3 players in India as no legal MP3 software is currently made in India.
In order to enable existing theatres to modernise themselves and be profitable, CII has suggested that the 10-per cent depreciation rate for theatres should be increased and should be equated to 20 per cent for the hotel industry. According to CII, the need of the hour is rationalisation and formalisation of the entertainment tax across the country. A committee similar to the VAT committee should be set up and be given a specific deadline to come up with suggestions, feels CII.
With regard to import duty, CII has suggested that all projection equipments under the tariff head 9007.20, sound equipment under the tariff head 85.18 and screens under the tariff head 9010.60 should be exempted from the countervailing duties.
CII feels that the current 12,000 movie theatres are inadequate and there is a need to create new movie theatres and modernise existing ones. To meet this end, CII has suggested that for new multiplexes and a completely renovated theatre special tax holiday for income tax and service tax should be provided.
To give a boost to the print media, small and medium newspapers should be allowed to access funds at a lower costs and CII feels that a Rs 100-crore fund should be set up for the easy availability of funds.