It was a meeting nobody wants to talk about. Heads of a handful of Indian broadcasting companies quietly converged in Mumbai last week to revive the Indian Media Group.
This time the agenda was to rake up the issue of anamolies in taxes that the Indian and foreign broadcasters pay. The Indian television companies which uplink from India, claim that they pay huge amounts of taxes while their foreign counterparts get away scott free.
“We pay 35 per cent income tax. While foreign broadcaster pay barely 3 per cent to 4 per cent tax in India,” says a top level executive in an Indian broadcasting company. “We also pay service tax and withholding tax,” adds a director in a news channel.
To be sure, the taxation issue has been raised by the Indian broadcasters earlier, but this time it will be pushed by the Indian Media Group that first came into being to lobby for changes in the foreign direct investment (FDI) norms in TV news channels. The changed policy affected the Star News structure which had to look for a new Indian partner.
After a long gap, the group has come together again. “The foreign broadcasting companies have registered themselves as agents in India and keep barely 10 to 15 per cent of their income. The rest is remitted abroad,” says the head of an Indian channel.
Others foreign companies apparently remit only the dividends, while foreign broadcasters take away their topline.
“Estimates are that between 70 and 80 per cent of their total revenue goes out of the country,” says a top executive of an Indian broadcasting company.
A source in a foreign media company dismisses the allegations. “The hue and cry is just because we are foreign. There are different tax structures for foreign and domestic companies. We pay whatever is due according to law,” he says.
In the last few years, the Indian broadcasters have apparently met three consecutive finance ministers on the issue. They are ready with another representation. For them the battle is not yet over.