IBF exhorts govt to remove service, fringe benefit taxes

NEW DELHI: The Indian Broadcasting Foundation has petitioned the government to remove the disparity between the electronic and print media by seeking exemption from service tax on advertising revenue.

In its pre-Budget memorandum to the finance ministry, the IBF has said an advertisement attracts service tax while being broadcast, but is exempted when appearing in print press.

Thus it makes advertisements 12.25 per cent costlier in the electronic media, distorting the level playing field between various media, the IBF memo states.

The IBF, founded in 1999, is the largest national organization of television broadcasters. Its membership extends to 30 major broadcasters, which make available more than 130 TV channels to millions of Indian homes.

In order to achieve targets for digitalization during the first phase (2006 to 2010), as mandated by the sector regulator, the customs and excise duties on all sector-related equipment should be kept at zero for the next five years.

IBF has exhorted the finance minister to reduce customs duty of set top boxes (STBs), used in addressable system, to zero for at least another five years to ensure that boxes could be made available to customers at affordable prices.

Joining issues with many other industries, IBF has said that keeping in view the special characteristics and role in sub-serving the fundamental right of receiving and dissemination information, the fringe benefit tax (FBT) should not be imposed on the electronic and print media.

It has argued that if the government wishes to levy FBT, then it should be categorized along with five other industries, including infotech, where the tax concerned has a low base of five per cent.

Some other demands of the IBF are following:

# Inclusion of the cable & broadcasting industry under section 72 A of the Income Tax Act, which provides incentive for takeover /amalgamation by robust companies.

# Direction to government field officers to accept service tax on subscription revenue (introduced in June 2005) on the basis of the list of cable operators having a turnover of more than Rs. 400,000, since those with lesser turnover have been exempted by the government.

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