Tax rebate for entertainment industry under way
I and B Ministry is aiming for a cut of 25-30 pc in entertainment tax to give breather to the Rs 44,000 cr media-entertainment industry. In pics: Deepika Padukone
By Pallavi Arun Verma, INDIATIMES NEWS NETWORK |
NEW DELHI: As we are inching towards the New Year, here comes a breather for the Rs 44,000-crore media and entertainment industry. The Ministry of Information and Broadcasting is aiming for a further cut in entertainment tax to 25-30 per cent.
"I'm negotiating with the finance ministry for bringing about huge tax rebates for film and entertainment industry in the Union Budget 2008," Minister of Information and Broadcasting Priya Ranjan Dasmunsi said at a two-day Summit on Media and Entertainment (M&E) here on Wednesday.
The recommendations of various groups set up to suggest changes in the taxation policy will be considered, and a meeting will be held with stakeholders in Mumbai soon to finalise the agenda, he added.
With technology and digitization fuelling the 18% CAGR, a tax breather will only enhance the growth. The M&E sector is expected to be worth Rs 100, 000 crore by 2011 while television alone will account for the Rs 50,000 crore pie, according to a study by Ernst and Young and Assocham, which had organized the Global Summit.
"We have formed five groups under the ministry on piracy, revenue matters, digitalisation among others. We will take a comprehensive view of all the five reports submitted by the groups and announce a new policy for the M&E next year," Dasmunsi said.
Civil Aviation Minister Praful Patel also gave a call for reduced taxation so that films are not only viewed at cheaper costs but also produced at much competitive rates. He lamented that government took more than a decade to accord industry status on films and entertainment and promised that now the government would be more liberal towards the industry.
Though the Film and Television industry contributes bulk of the entertainment industry, emergence of digital media has given way for anytime, anywhere entertainment.
Digital music sales have surpassed the physical sale of music and will amount to 88 per cent of the total sales by 2009 from the current 56 per cent, Farokh Balsara, National Sector Leader, Ernst and Young, said at the Summit.
"I'm negotiating with the finance ministry for bringing about huge tax rebates for film and entertainment industry in the Union Budget 2008," Minister of Information and Broadcasting Priya Ranjan Dasmunsi said at a two-day Summit on Media and Entertainment (M&E) here on Wednesday.
The recommendations of various groups set up to suggest changes in the taxation policy will be considered, and a meeting will be held with stakeholders in Mumbai soon to finalise the agenda, he added.
With technology and digitization fuelling the 18% CAGR, a tax breather will only enhance the growth. The M&E sector is expected to be worth Rs 100, 000 crore by 2011 while television alone will account for the Rs 50,000 crore pie, according to a study by Ernst and Young and Assocham, which had organized the Global Summit.
"We have formed five groups under the ministry on piracy, revenue matters, digitalisation among others. We will take a comprehensive view of all the five reports submitted by the groups and announce a new policy for the M&E next year," Dasmunsi said.
Civil Aviation Minister Praful Patel also gave a call for reduced taxation so that films are not only viewed at cheaper costs but also produced at much competitive rates. He lamented that government took more than a decade to accord industry status on films and entertainment and promised that now the government would be more liberal towards the industry.
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Though the Film and Television industry contributes bulk of the entertainment industry, emergence of digital media has given way for anytime, anywhere entertainment.
Digital music sales have surpassed the physical sale of music and will amount to 88 per cent of the total sales by 2009 from the current 56 per cent, Farokh Balsara, National Sector Leader, Ernst and Young, said at the Summit.
Talking about, digital entertainment, he said every five out of 10 people in India watch big screen Cinema on small screen.
With the easy accessibility of new films and music, the consumers' will to pay for media consumption has grown in the last few years.
"Earlier, 90 per cent of a film's revenues used to come from Cinema halls. The share is now around 60 per cent. This is due to the emergence of Home entertainment and digitalization," Mr Balsara added.
Rajshri Productions' film Vivah was released simultaneously in November 2006 in theatres and online on its website, the first such attempt by any production house in India. The movie was made available on a free view basis for the first few days, post which it was sold at Rs 400 ($10) per download. Nine months later, it had sold 6,500 downloads.
Higher penetration of television sets and VCDs/DVDs and the arrival of digital pay channels are opening new avenues of income, as well as changing existing business models.
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DTH the highest single driverThe cable industry has to be much more structured and a tax breather for the Direct-to-Home (DTH) players may be a good move, he said.
Tata Sky, which has added 1.5 million subscribers in less than a year, wants the punitive taxation levels to be done away with.
"DTH is a new industry and should be made affordable to more people. We have already reached 1.5 million subscribers and are looking at 8 million by 2011. For this, the cost structure needs to be proper," Vikram Kaushik, CEO, Tata Sky said.
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By 2010, 28 per cent of an estimated 100 million pay TV households will migrate to digital pay television platforms. "Among the three platforms - DTH, digital cable and Internet Protocol Television (IPTV), the Direct-to-Home technology will emerge as the leader over the next three years. The growth of IPTV will be limited due to high cost of additional infrastructure and low broadband penetration, "Mr Balsara said.
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