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Lower duties likely for entertainment industry

03-February-2004
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Lower duties likely for entertainment industry

Rationalisation of duties on equipment/ hardware is expected in the film and entertainment sector, according to sources in the government. Lowering of import duty on equipment for the film sector is among the top demands of the industry. Ahead of Lok Sabha elections, the government is not likely to ignore the demand of the film industry, sources said.

The entertainment industry is being seen as the emerging economic powerhouse, and lower duties would make it more competitive, said an official in the information and broadcasting ministry. Also, a lower duty structure is expected to help contain piracy in the entertainment sector, he added.

Among the major hardware imported for cinema exhibition business, projection equipment attracts a total import duty of 50.8 per cent; sound equipment, screens and AC equipment 62.9 per cent each; and escalators/elevators at 50.8 per cent, according to business chamber Ficci (Federation of Indian Chambers of Commerce and Industry).

In its pre-Budget memorandum, the industry has sought exemption from countervailing and additional customs duty on cinema exhibition equipment, so that the total import duty is reduced. Countervailing duty is around 16 per cent and additional customs duty 4 per cent on these equipment at present.

Also, business chambers on behalf of the film industry, have asked for lowering of customs duties on digital projection, graphic systems, broadcast automation systems, film recorders, scanners, video output systems, cinema speakers, video tape recorders, digital betacam, etc. While the existing customs duties on these equipment vary between 38 per cent and 56 per cent, the industry wants it down to around 24 per cent.

In the case of CDs, audio CDs were exempted from central excise last year, but not video CDs. The industry wants the excise duty exemption for VCDs as well. In its pre-Budget memorandum, Ficci said: “Removing excise duty from audio disc is only a half step towards the ultimate goal of eliminating the piracy menace and healthy growth of the entertainment industry.” So, it has suggested that “all video CDs should be treated as human creative inputs (like software) and hence should not be subjected to the central excise duty.” If video and other optical discs are exempted from excise duty, the difference between the legitimate product and pirated product would be reduced, it added.

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