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M&E industry reacts to service tax & costlier STBs

02-March-2015
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M&E industry reacts to service tax & costlier STBs

Last year when FM Arun Jaitley announced the first Modi-led government’s Budget, M&E industry was hoping for the tides to turn. This year too, print players and broadcasters were looking forward to the Union Budget 2015. Some announcements made with this Budget have elicited disappointed reactions.

The increase in service tax from 12.36% to 14 % is a big blow to the industry. Announcing the raise in service tax, Finance Minister Arun Jaitley said, “Introduction of GST is eagerly awaited by Trade and Industry.  To facilitate a smooth transition to levy of tax on services by both the Centre and the States, it is proposed to increase the present rate of service tax plus education cesses from 12.36% to a consolidated rate of 14%.”

This announcement will take a toll to the entire consumer and media industry as well. The increase in tax will impact on their profits. Some of the industry leaders reacted on this immediately via social media.

Mitrajit Bhattacharya, Publisher Chitralekha Group and President AIM tweeted, “Service tax increased to 14%??? Not happy with #budgetspeech.”

While Senior Journalist and Former Communication Adviser to Prime Minister Manmohan Singh, Pankaj Pachauri tweeted, “Increasing Service Tax to 14% from 12.3% and tax increase on Set Top Boxes are 2 negatives for media sector. #Budegt2015.”

Partho Das Gupta, CEO, BARC also commented with his tweet,  “ache din!! hmm RT @TimesNow: Service tax increased to 14%: FM Arun Jaitley #SuperBudget.”

Set top boxes becoming more expensive is another disappointment likely to affect the digitisation process.

According to media reports, Dr Subhash Chandra, Chairman Essel and Zee Group also criticised the increase in service tax. He said that the media industry was expecting relief in terms of taxes which have been imposed during previous regimes. He highlighted that cable and DTH industry bring signals to 110 million homes and it is suffering from service tax, entertainment tax and import duty on set top boxes and other equipment.

He also said that he was expecting reduction of taxes in the first phase and expect to get same sops in second and third phase. He urged the Finance Minister to recognize that media industry is a catalyst in digitizing India as well.

The good news aired was for the public broadcaster as the total budget for the Information and Broadcasting industry has been raised to Rs 3711.11 crores from the previous budget of Rs 3176.80 crores.
 

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