Ficci seeks widespread benefits, exemptions for digital cinema

NEW DELHI: The Federation of Indian Chambers of Commerce and Industry (Ficci) has demanded various benefits for the digital cinema industry, including tax holiday under Income Tax, exemption from MAT and DDT, 100 per cent depreciation benefit, sales tax exemption and customs benefits.

Topping the list of demands is a 10-year income tax holiday, just as is done in the case of various types of infrastructure development, including creation of trunking, broadband network and tax holidays multiplexes.

The Ficci document has also strongly stressed the definite need for removal of service tax in the case of this "fledgling industry",


It has shown that at various stages, from conversion of analogue images to digital and the time of being actual screening, the players - operators, distributors, rentals for service providers, etc. pay several times.

"All the services described in the business model above attract a levy of service tax at 12% plus 2% education cess thereon, albeit under different service categories. It is submitted that for an industry in its infancy, a cost of 12.24% of its revenues will have a significant adverse affect on its prospects, if not serve to destroy it altogether," Ficci has emphasised.

The document spelling out Ficci‘s budgetary wishlist says that digital cinema has tremendous benefits, not the least of which is less burden on the environment, which is the ground on which it has demanded 100 depreciation benefit for the sector.

The document argues that analogue prints are made from polyester films and are destroyed by burning, which is a huge bio-hazard. Digital prints are mere digital files and can be simply erased from our server‘s memory. Hence, film waste removal is taxing on the environment, because polyester films cannot be recycled.


Ficci has suggested the development of digital cinema infrastructure that would benefit the industry hugely.

It argues that this will increase box office collections, generate rural employment and curb piracy, as well create savings in foreign exchange and minimize wastage in print.

"In India", the document argues, "software piracy has assumed gigantic proportions. Ficci studies estimate that the Indian film industry loses almost 42 per cent revenue due to piracy.

"In absolute terms this amounts to approximately Rs 2,000 crore on account of piracy. This is money on which the government earns neither Entertainment Tax nor Income Tax.

"An early and widespread release of movies, enabled by digital cinema will act as an effective deterrent to piracy," it says.

Ficci also says that early migrants to the digital cinema system have reported more than 100 per cent increase in revenue collections by way of increased box office collections due to early screening of movies.

"Needless to mention, this has also translated into enhanced collections of Entertainment and Income Tax," stressed the document.

Digital cinema makes niche cinema and regional language films more commercially viable. This will, in turn, generate employment for local artists and technicians and other regional film industry related infrastructural suppliers, holds Ficci.

It has stressed that digital cinema infrastructure equipment, particularly the digital projector and digital movie compressor, which attract the peak rate of custom duty, be given exemption.

"Since these items are not manufactured in India and are a very heavy cost burden to the provider these should be treated at par with hi-tech and information technology sector items with customs duty being reduced to nil," suggests Ficci.

Ficci has also recommended that the state governments give lease tax exemption to the new industry.

Considering the way digital cinema infrastructure is poised to revolutionise the films and visual arts exhibition in the country, with multi-fold advantages to all the constituents of the society, (viz. the content owner, the theatre owner, the tax administration, and the general public as the ultimate consumer), it certainly deserves a whole hearted support from the Government of India, Ficci feels.

"And as elucidated above, a strong Digital Cinema Infrastructure would, in the long run, pay back more than what it is requesting for now."


Latest Reads
Highly-beneficial interactions take place at Broadcast India '16

The 26th Broadcast India Show concluded over the weekend in Mumbai, and was easily the most exciting Broadcast India Show yet. With thousands of eager, high-quality trade visitors swarming the show floor, a sentiment signalling highly-beneficial exchanges and interactions echoed through the halls...

Technology Software Applications
India, China to propel APAC, beat CAS Europe market share

APAC is expected to overtake the market share of Europe in future due to an increasing demand for digital TV set-up boxes in countries such as China and India. North America and Europe dominated the global CAS market in 2015. APAC region is estimated to mark a growth rate of 12.0 per cent CAGR...

Technology Hardware Set-top Boxes
India lucrative market for 4K UHD STBs: Grand View Research

Here’s a view on the demand for 4K or ultra high definition (UHD) set-top boxes (STBs) in India.

Technology Hardware Set-top Boxes
Infor appoints Dass as south Asian subcontinent V-P

Infor, a leading provider of business applications specialized by industry and built for the cloud, has appointed Ashish Dass as the vice president and managing director for the south Asian subcontinent. Infor software helps eliminate the need for costly customization through embedded deep...

Technology Software Applications
Siti & DishTV opt for Conax conditional access

The Essel group has been using Conax’s tech for sometime now for its Siti Network (earlier known as Siti Cable). Now the group has extended that partnership for another product for both Siti Network and DTH operator Dish TV India. This time it is for the cardless set top boxes that the two are...

Technology Hardware Set-top Boxes
Imagine Communications extends functionality of Selenio One unified transcoding platform to OTT

MUMBAI: Imagine Communications, empowering the media and entertainment industry through transformative innovation, today introduced a high-density adaptive bitrate (ABR) transcoding product built on Selenio One™, the company’s software-defined linear transcoding platform. Selenio One is designed...

Technology Hardware Components
DJI Makes Your Smartphone Smarter with the New Osmo Mobile

DJI, the world leader in creative camera technology, Thursday launched the Osmo Mobile, an extension for smartphones that turns them into intelligent, precision camera systems.

Technology Hardware Components
Prime Focus Tech gets funding from PE firm Ambit Pragma

MUMBAI: Prime Focus Technologies (PFT) – the technology offshoot of media services company Prime Focus - informed the Bombay stock exchange today that it had received its first round of funding from growth capital private equity fund Ambit Pragma.

Technology Software Applications
Three new products developed by C-DOT launched on its Foundation Day

Communications Minister Manoj Sinha today expressed the hope that 100,000 Gram Panchayats (GPs) will be connected through Optical Fibre Cable (OFC) by March next to set up a network infrastructure to serve the rural masses.

Technology Hardware Distribution

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories