Budget 2010: Service tax reduction tops radio players’ wishlist
With just a few days to go for the Union Budget 2010, the radio industry has once again has pinned its hopes on Finance Minister Pranab Mukherjee. exchange4media speaks with radio players on their Budget wishlist, which includes cut in service tax and lowering of duties on import of radio equipment.
With just a few days to go for the Union Budget 2010, the radio industry has once again has pinned its hopes on Finance Minister Pranab Mukherjee. exchange4media speaks with radio players on their Budget wishlist, which includes cut in service tax and lowering of duties on import of radio equipment, among others.
Tarun Katial, CEO, Reliance Media World Ltd, commented, “We would like to see Phase III implemented, or at least the policies recommended for Phase III need immediate implementation as this will increase the footprint of FM dramatically, giving the medium an impetus for growth. Some of the expectations from the Budget include waiver of customs duty on import of capital equipment for setting up of radio stations, waiver of service tax, increase in the FDI limit and compulsory allocation of funds for private FM stations. This apart, we also expect the 4 per cent revenue share to be reduced by 50 per cent, keeping in mind the losses that the industry is currently making.”
Prashant Panday, CEO, ENIL, noted, “Since most capital items used in radio stations are imported, we would ask for zero import duties – especially since Phase III of radio will happen only in the really small towns, where the economics are under pressure. Since radio is the main medium, which engages the ‘aam aadmi, it’s important that bank lending to radio stations is considered as ‘priority sector’ lending. This will help radio broadcasters raise funds from banks, something that most are finding difficult to do today. Most of our expectations, however, are from the Phase III policy.”
According to Harrish M Bhatia, COO, My FM (Dainik Bhaskar), “It is pertinent that the Union Budget addresses some of the important financial issues of the radio industry. Firstly, the duty on imported radio equipment should be reduced. Currently, the import duty on radio equipment is around 37 per cent. Also, the industry pays service tax at the rate of 10.30 per cent, which should be preferably completely removed to give the extra push to this sector.”
Bhatia lamented, “Radio, despite being such a robust medium with excellent potential, has definitely not been in priority, and it is relevant to note that post the second phase of bidding, which was in 2006, the Government has not done anything concrete for the radio industry.”
Nishant Mittal, CEO, Radio Misty, said, “We are seeking an extension of the license period from the current 10 years to 15 years, opening of multiple frequencies, and allowing airing of news and current affairs. Music royalty is a big issue and we hope it will be solved. We are also hoping a hike in FDI level from the current 20 per cent. There should be tax holiday for radio stations too. There should also be reduction in customs duty on transmitters, antenna, combiners and other studio equipment. We are also hoping for concessional rates of interest on loans taken by the radio industry. I do believe the Government has not paid full attention to the needs of this industry. Radio is a very mass based medium and caters to a large chunk, so the Government should take necessary steps to help this industry.”
Eastern Media Ltd Director Monica Nayyar Patnaik’s wishlist includes “increasing licenses in a market like Orissa, service tax is yet another burden for this industry, which we hope the Government will at least reduce. This apart, the Government should also increase the number of frequencies and allotment on channels. As compared to other countries, radio is still at a nascent stage in India and is a growing medium. Which other medium is reaching out to villages and at such a low cost? No other besides radio. This is the right time and the right opportunity, where they can help the radio industry grow by giving more sops and more leverages.”
Suresh Balakrishnan, COO, Mail Today, said, “We hope that the Government will first of all cut down taxes on radio, and secondly, take necessary steps to ensure that this medium reaches out to more people, as a result it would help this medium grow further.”
On a different note, Shreyams Kumar, Director - Electronics Media, Mathrubhumi Printing and Publishing Co, said, “We only hope that the Budget would be growth-oriented, which would drive the GDP growth rate to 8-9 per cent, which, in turn, would help the industry grow further.”
While the demands may not be too different from what they were last year, what remains to be seen is whether these demands would be met this time round.
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