January 5: A proposed eight per cent tax in the 1997-98 Union Budget on recordings of television programmes on blank cassettes has spread panic among film and television programme producers.This tax implies that the makers of TV serials, news bulletins, talk shows, soap operas and comedy shows and even educational videos would have to pay tax in crores of rupees as levy "on video cassettes manufactured from unrecorded cassettes."A memorandum signed by television houses like United Television, Amitabh Bachchan Corporation Limited and Plus Channel has dubbed this proposal "unrealistic and illegal", as it seeks to levy tax on the television programmes produced, rather than on the raw stock.K D Shorey, general secretary of the Film Federation of India said, "The Value Added Tax (VAT) can be imposed only on the ex-factory price. Films and TV programmes are not manufactured items like soaps and tins." He also claimed, "The levy is also illegal and signals danger for the film industry as well, as it could lead to a similar levy on film negative. It is an absurd interpretation of law that can be challenged in court."The FFI will make a representation to Revenue Secretary N K Singh on January 9 appraising him of the adverse effects this levy could have on the growing television industry."In a competitive field like television programming, the levy will only complicate the process of producing a serial. It will add to the cost of serials and definitely burden serial makers," opined Prem Kishan.Prem Sagar, whose serial Krishna on Doordarshan earns the maximum advertising revenue, pointed out that the timing of the levy is wrong, as video technology has become obsolete and video cassettes are now giving way to Compact Discs."The levy will increase the production cost of each television programme even if it is meant for educational purposes. While it may be easy for private channels like Zee TV, MTV, Sony and Star TV to absorb the levy, Doordarshan will find it difficult to adjust," he said.
