Others Budget 2009 wishlist: Media industry for reduction in service tax, FBT

Budget 2009 wishlist: Media industry for reduction in service tax, FBT

Author | Manish Ranjan | Tuesday, Jun 30,2009 9:46 AM

Budget 2009 wishlist: Media industry for reduction in service tax, FBT

With just a few days left for the Union Budget 2009-10, there are various expectations from different sectors and industries. Like the corporates and common man alike, the media industry, too, is hoping for a few rebates and reforms. exchange4media spoke to some leading media players to find out what’s there on their Budget wishlist.

Expectations from the digital media and online services sector are running high. Exemption or reduction in service tax is the key agenda for digital media players.

Atul Hedge, CEO, Ignite Digital Solutions Pvt Ltd, said, “My expectations from this Budget for the digital media industry is service tax exemption or reduction from the same. This year, the Budget would be more powerful than last year. There would be no dramatic changes in the Budget, but at the same time, the UPA Government has come in a strong position, so we can hope that this year’s Budget would definitely be better than last year.”

Electronic media players are looking for exemption or reduction in FBT (fringe benefit tax) and service tax. Barun Das, CEO, Zee News Ltd, mooted, “Bring FBT to the level of 5 per cent from the current 20 per cent. Media companies need to incur several expenses in travel and communication for their operations like newsgathering, shows, etc. TV channels should be treated on par with the print media, which enjoys exemption from service tax.”

He further said, “Take various steps to encourage digitization. For example, make digital set-top boxes cheaper; 4 per cent special additional duty and 8 per cent countervailing duty should be brought down to zero. Treat broadcasting, DTH and cable services as part of the infrastructure industry to fuel their rapid expansion. Service tax, entertainment tax and VAT should be subsumed in GST and only a single unified GST rate should apply.”

Agreeing with Das, Amit Sinha, Director & CEO, Triveni Media Ltd, said, “Service tax exemption or reduction is the key expectation for the broadcasters. The rate of service tax is high compared to the print industry. We are hoping that the Government will look into it in this year’s Budget.”

Samir Ahluwalia, Editor, Zee Business, noted, “The world has turned upside-down since the time the last Budget was presented. Post that, several mini-budgets have been presented as ‘stimulus packages’ to tackle the global economic slowdown. That’s why this year’s Budget assumes extra importance.”

He further said, “It is being billed as a Budget, which will redefine the contours of India’s economic growth, test the growth rate against a surging tide of bad news globally, and a Budget that will take India ahead. It will be bold, difference and will come from a government brimming with confidence. It will take India ahead in its entirety.”

On his expectation from the Union Budget, Ishan Raina, CEO & MD, Out of Home Media, said, “I am expecting a Budget that will make people feel good, only then will it be a good Budget for me and the industry too.”

Along with national broadcasters, foreign telecasters, too, have their own expectations. Himanshu Parekh, Executive Director, PricewaterhouseCoopers, pointed out, “The main income streams of FTCs beaming their channels in India comprise ad revenues and subscription revenues. The ad revenues earned by FTCs are liable to tax in India only if they have a Permanent Establishment (‘PE’) in India.”

He further said, “Taxability of subscription revenue also is a highly controversial issue, that is, whether it amounts to royalty (taxable on a gross basis) or business income (taxable on the same basis as ad revenues). The FTCs are of the view that it is in the nature of business income, while the Tax Authorities treat it as royalty in certain cases.”

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