Very little entertainment
For the media and entertainment industry, the only spark of good news is in the area of digitalisation of film exhibition and distribution.
By ET TEAM |
MUMBAI: For the media and entertainment industry, the only spark of good news is in the area of digitalisation of film exhibition and distribution. On all other fronts, the Budget seems to have more minuses than pluses for the industry. While tax deductions and exemptions have been given to the digital cinema segment, broadcasters will be impacted by the extension of Customs duty on equipment such as TV cameras, auto recording equipment, channel video mixer/switches, which were previously exempt from Customs duty.
This is likely to increase the overall capital expenditure for broadcasters, especially for news channels. Said Times NOW CEO Sunil Lulla: “Despite having no domestic sources of broadcast equipment, CVD continues to be levied on import of broadcast equipment which will impact our costs.” Also, set-top boxes have come into the tax net with the CVD and excise duties exemption being withdrawn, making it more expensive to manufacture STBs locally.
The finance minister has proposed that digital cinema development projects be assessed to Customs duty as 'projects imports' , which essentially translates into Customs duty reduction from 10% to 5%. This, according to media analysts, will help reduce film piracy through digitalisation of film exhibition and distribution, as well as incentivise the creation of more digital cinema infrastructure.
Also, digital cinema infrastructure has also been exempted from the service tax net. Put together, these benefits is expected to result in 25-30 % growth, helping the film industry recover some of the approximately Rs 1,000 crore of revenue which is lost to piracy, year-on-year.
Also, previously , the conversion of analogue film print to digital , the rentals on exhibition equipment and software , and a fee for software decryption and digital screening services attracted a service tax of 12% and an additional 2% education cess. The exemptions will, in effect, increase the profitability of digital companies, which in turn, are expected to pass on the benefits to multiplexes and film producers.
Zee News CEO Harish Doraiswamy said: “From an electronic media business standpoint, the Budget is a disappointment. Compared to print, we continue to receive differential treatment with regard to service tax.”
This is likely to increase the overall capital expenditure for broadcasters, especially for news channels. Said Times NOW CEO Sunil Lulla: “Despite having no domestic sources of broadcast equipment, CVD continues to be levied on import of broadcast equipment which will impact our costs.” Also, set-top boxes have come into the tax net with the CVD and excise duties exemption being withdrawn, making it more expensive to manufacture STBs locally.
The finance minister has proposed that digital cinema development projects be assessed to Customs duty as 'projects imports' , which essentially translates into Customs duty reduction from 10% to 5%. This, according to media analysts, will help reduce film piracy through digitalisation of film exhibition and distribution, as well as incentivise the creation of more digital cinema infrastructure.
Also, digital cinema infrastructure has also been exempted from the service tax net. Put together, these benefits is expected to result in 25-30 % growth, helping the film industry recover some of the approximately Rs 1,000 crore of revenue which is lost to piracy, year-on-year.
Also, previously , the conversion of analogue film print to digital , the rentals on exhibition equipment and software , and a fee for software decryption and digital screening services attracted a service tax of 12% and an additional 2% education cess. The exemptions will, in effect, increase the profitability of digital companies, which in turn, are expected to pass on the benefits to multiplexes and film producers.
Zee News CEO Harish Doraiswamy said: “From an electronic media business standpoint, the Budget is a disappointment. Compared to print, we continue to receive differential treatment with regard to service tax.”
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