Budget 2018: Broadcast industry elated by 25% corp tax reduction
The Broadcast sector certainly had a lot to say about the Union Budget announcement. While some were happy with their predictions coming true, most were elated at the 5 per cent reduction in corporate tax for companies with turnover upto Rs.250 crore
Published - Feb 5, 2018 8:52 AM Updated: Feb 5, 2018 8:52 AM
The Broadcast sector certainly had a lot to say about the Union Budget announcement. While some were happy with their predictions coming true, most were elated at the 5 per cent reduction in corporate tax for companies with turnover upto Rs.250 crore.
"The Budget announcements signal a stronger eco-system for media and broadcast industry. In continuation with my pre-budget expectations, I am happy that FM Jaitley has kept his promise by reducing corporate tax rate to 25 per cent.'' Ms. Megha Tata, COO, BTVI.
Anup Vijai, COO, Contiloe Pictures, expected a cut in the corporate tax and also some relief to the salaried class. "The good thing that has happened is the reduction in corporate tax to 25 per cent from 30 per cent for companies with turnover up to Rs. 250 crore. However, this year's budget has brought no major relief to the salaried class," he said.
Mitesh Shah, Head of Finance, BookMyShow, was observing the budget with a magnifying glass and believes that the Union Budget 2018 is both populist as well as pragmatic. He felt that the govt is creating a strong springboard to make digital jump like never before.
"There is also positive news for start-up ecosystem as the benefit of dedication u/s 80-IAC is extended to start-ups incorporated even after April 1, 2019 but before April 1, 2021. The budget also brings lot of clarity around tax administration and rationalization as well as relief from MAT for companies admitted under Insolvency Resolution Process. With 99 per cent of corporates now being covered under the reduced corporate tax rate of 25 per cent, the Finance Minister has substantially lived to the commitment of rationalizing corporate tax made in 2015," said Shah.
He also said, "The Budget focuses on growing the promising rural economy and extending digitalization to rural citizens which can yield great results in the form of increased household rural consumption, and thereby providing internet driven businesses with a great potential market opportunity to tap. Increasing allocation for digital India and the overall strong thrust on digitalization is a welcome step. Initiatives such as high-speed connectivity and Wi-Fi access to five crore rural citizens and tax disallowance on cash expenditures above Rs. 10,000 for all entities now, also give digital movement a great push and will benefit internet businesses. However, some more direct incentives for promoting digital ecosystem in form of lower MDR or cashbacks would have been welcomed by online platforms as well as merchants."
Joy Chakraborty of Network 18, found the budget to be good. "A standard deduction of Rs. 40,000 for salaried taxpayers will benefit 2.5 crore people. I believe that it will create demand in the market. Lots of things have been done for agriculture and infrastructure. Now 60 percent of Indian population is comprised of farmers and for all the channels like us, the maximum growth is coming from Tier 2 and Tier 3 cities. Channels feel that metro cities are more or less exhausted. All of us are looking for growth from towns. With cable connections already established and digital getting the push its getting, small towns will directly accelerate consumption there. The money would shift to regional space," he said.
Shah said that the move to levy 10 per cent LTCG is commendable in the larger interest of the economy and fiscal situation. "Another significant change proposed in the budget is inclusion of 'Significant Economic Presence' in the definition of 'Business Connection' whereby even digital presence of non-resident enterprises in India through digital platforms shall be construed to be taxable presence irrespective of whether or not the non-resident has a place of business in India or render services in India. This provision will bring about paragon shifts in nexus rules under DTAA," he said.
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