It’s a disappointing budget, says the film industry

While there is almost nothing in the budget pertaining to the Media and Entertainment, the little bit that is there is quite balanced. With the increase in service tax from 12.36 per cent to 14 per cent, the tax burden on film-makers has increased. On the other hand, the service charge that was levied for the transaction between distributors and exhibitors has been exempted so there will be no service tax on the exhibition agreement, which is good news! But if we look at the bigger picture, these are meager changes. We need serious reformed changes for the industry. The first in line should have been an industry status, which we were even hoping for but haven’t got. An industry status gives the people associated with it a lot of subsidy, ultimately helping it grow. Currently, we are like a cottage industry. As far as the benefit on the entertainment tax front is concerned, it doesn’t fall under the purview of the Central government, but the State government. Now that’s a constant fight for us and we are hoping that with the Goods and Service Tax (GST) in 2016, there will be some relief.

Jehil Thakkar,
Partner and Head of Media and Entertainment sector, KPMG in India

The Media & Entertainment industry has been consistently expanding and contributing to the economy’s growth. The sector had a lot of expectations from the budget on the policy front such as liberalisation of foreign investment regulations, reduction of indirect taxes, harmonisation of withholding taxes, tax incentives to boost economic activities and take the growth engine to a new pedestal. However, not much has been done. Despite being a capital intensive sector, the M&E industry is yet to be bestowed with the status of ‘Infrastructure’ thus depriving M&E players from various policy advantages and tax reforms, but proposed reduction of tax withholding rates on transactions with non-residents for technical services, transponder charges, content licensing, software royalties etc from25 per cent to 10 per cent is a welcome measure, which will provide some relief to the M&E industry.

Ramesh Taurani,
Managing Director, Tips Films Ltd

It’s very disappointing that there is nothing for the industry in the budget. We were at least expecting a relief in the service tax. Now, as we are on the way to the GST (Goods and Services Tax) next year, things will fall into place, and that is also the reason why many things pertaining to the Media & Entertainment industry were not taken up. GST will bring a lot of respite as it will, hopefully, also bring an end to the entertainment tax.

Shyam Shroff,
Director, Shringar Film Pvt Ltd

After barely watching it on TV, there seemed to be absolutely no solace whatsoever for the Film & Media Industry, but one needs to be cautious, for many a times you realise after a few days that somewhere in the fine-print of the budget speech, there is something that goes against you. Hope, that’s not the case this time. Besides, I never raise hopes while expecting something from the government. My only concern remains that a producer should be at full liberty to make the kind of films that he or she wishes to make without any hindrances while filming it and later during censorship.

Vivek Rangachari,
Business Head, DAR Investments & Commissioning Producer, DAR Motion Pictures

TThe biggest wish of the Media and Entertainment industry has been the abolition of service tax, which is already a burden to the precarious conditions of the producers. The increase to 14 per cent is definitely going to make things more difficult. A significant reduction, if not complete abolition of the service tax component, would have gone a long way in spurring growth and improving the financial health of the industry. The only hope in the budget is the gradual reduction in the corporate tax and the incentives for start-ups, which will help reduce the fiscal barriers for new talent in the business.