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Print players heave a sigh of relief on exemption from service tax

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Print players heave a sigh of relief on exemption from service tax

There have been mixed reactions to the maiden Budget of the Modi Government, but most in the industry agree that it is aimed at giving a boost to the economy and spur growth.

For the media and entertainment industry, Finance Minister Arun Jaitley has made some significant announcements. However, one primary demand of the media and entertainment industry – the hiking of FDI, especially in news media – remained unaddressed in the Union Budget 2014.

Meanwhile, on the one hand, digital players are bemoaning the re-introduction of service tax on sale of advertising space on online and mobile platforms, on the other hand, print players are happy to have been exempted from service tax on sale of space for advertisements in print media.

The Finance Minster, in his Budget speech, had said, “To broaden the tax base in Service Tax, it is necessary to prune the negative list and exemptions to the extent possible. Accordingly, the negative list has been reviewed and service tax liveable currently, on sale of space or time for advertisements in broadcast media, is being extended to cover such sales on other segments like online and mobile advertising. Sale of space for advertisements in print media however would remain excluded from service tax. Similarly, tax is being proposed on the service provided by radio-taxis to place them on par with rent-a-cab service. These new levies will come into effect from a date to be notified after the passing of the Finance Bill.”

Commenting on the Union Budget 2014, Rishi Darda, Editorial Director and Joint Managing Director, Lokmat Media felt that this Budget is similar to the ones presented in the last few years. He said, “Expectations were much higher, given the background they were coming from. Overall it looks similar to what has been happening in the last few years. From the newspapers’ point of view, I think not levying service tax on advertising in print media and no duty on newsprint are good decisions.”

He further said that the FDI could have been increased, since FDi in media is still very low.

Mitrajit Bhattahcarya, President AIM and Publisher, Chitralekha remarked, “Print has a huge role in dissemination of information/ imparting knowledge to every nook and corner of India. The role of print as an industry has been that of nation building. Any introduction of service tax on advertising will make many of the small newspapers and magazines unviable, which are currently doing excellent service of reaching knowledge to the remotest parts of India.”

KK Goyenka, Managing Director, Prabhat Khabar, too, welcomed the exemption of print media from service tax and no import duty on news print, and said, “Overall it is a good Budget and the Budget is for the long term.”


On the other hand, Varghese Chandy, Senior General Manager, Malayala Manorama said that the Budget will not have much impact on the print industry as it is already under stress. “What is welcome is that there is no additional tax,” he added.

Speaking in the levying of service tax on sale of ad space on online and mobile, he said, “Maybe the growth rate of digital has been very fast as compared to print and that led the Government to impose service tax on it.” 

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