Top Story


Home >> International >> Article

PIL filed challenging the tax system for foreign channels

Font Size   16
PIL filed challenging the tax system for foreign channels

The practice of charging foreign TV companies a normal tax rate on the presumptive profit of 10 per cent earned through advertisements in India has been challenged in the Delhi High Court through a public interest litigation, which maintains that the Income Tax Act already has provisions to estimate the incomes of nonresidents.

The PIL filed by advocate B L Wadhera has challenged two circulars by the Central Board of Direct Taxes — dated May 2, 1996 and April 15, 1998 — on the grounds that they have been issued solely to benefit the foreign TV companies.

According to the petition, the impugned circulars had caused a reduction in the rate of taxation for foreign TV companies from 55 per cent during the assessment years 1995-96 to 1997-98 to 48 per cent from 1998-99.

The effective rate, thus, worked out to 3.8 per cent for the years 1995-96 to 1997-98 and 3.3 per cent from 1998-99 onwards on ad revenues of the foreign TV companies. If calculated in terms of the normal rate of tax which was in force in those particular years.

Wadhera alleged that CBDT’s first circular was based on a presumption that ad agencies working for foreign channels were retaining 15 per cent of the gross amount earned by these companies, while their Indian agents were keeping another 15 per cent of their gross earnings. However, foreign channels which do not have an office in India operate only through agents, and were taking away the remaining 70 per cent of the revenue earned on advertising.


Markus Noder, Managing Partner, Serviceplan International, shared innovative tools, ideas and methodologies to generate tangible business values

The primary reason that led to growth of OTT is the constant improvement of internet speed and service across the country: Sandeep Gupta, ACT Fibernet

Siddharth Kumar Tewary, Founder, Chief Creative, One Life Studios and Swastik Productions, on owning the IP on his most ambitious project 'Porus,' the risk of recovering its cost and his distribution strategy

Webscale plans to build the brand around smooth operations for the e-commerce sector and then move on to demand generation

The Tata Group is considering review of its Public Relations mandate which is currently handled by PR firm Edelman in association with Rediffusion. The review is likely to happen post January 2018.

KVL Narayan Rao, Group CEO, and Executive Vice Chairman of NDTV passed away at 63 after battling cancer for two years

Week 44 (October 29-November 4, 2017) of RAM Ratings saw Big FM and Fever FM dominating Mumbai. Meanwhile Fever, Radio City and Radio Mirchi dominated Delhi, Bangalore and Kolkata respectively.