| NEW
DELHI: The Information and Broadcasting Ministry has proposed that entertainment
tax on broadcasting and cable sector should be included in the proposed Goods
and Services Tax (GST) regime. In
its budgetary proposals for the financial Year 2010-11 submitted to the Finance
Ministry, it has been proposed that the basic customs duty for the digital head-end
equipments should be scrapped to give impetus to digitisation in India. At present,
the basic customs duty for digital head-end equipments varies from 7.5 to 10 per
cent.
The
customs duty on the digital set-top box should be progressively brought down to
zero for a period of five years. The
I&B Ministry also said the broadcasting, cable and DTH sectors be treated
as infrastructure industry and should receive all accruing benefits and incentives
including availability of finance at concessional rate of interest to give boost
to digitisation in the country. Digital
cable service providers, DTH service operators, HITS operators and similar digital
content distribution service providers undertaking digitalization of their services
should be eligible for a deduction of 100 per cent of the profits and gains derived
by them in providing the respective digital services for the first five assessment
years and thereafter 30 per cent of such profits and gains for further five assessment
years in a block of 15 years. The incentive may be provided to the operators who
commence the service on or before 31 March 2011. Broadcasting
services including cable services, DTH service and HITS services and other similar
content distribution services, require huge investment and may see consolidation.
However, it is imperative to allow carry forward of accommodated losses in case
of amalgamation or demerger. Like telecom sector, all broadcasting services should
also be covered under the definition of industrial undertaking, as defined under
the Income Tax Act. Service
Tax is not applicable on advertisement revenue on the print media side and so
the broadcasting entities be exempted from payment of service tax on revenue accruing
from advertisement shown on electronic medium - television and radio.
The anomaly
of duty for import of film in the form of 35 mm cinematographic print vis-à-vis
films imported in the form of Betacam / U-matic tapes, VCD, and DVD should be
removed. While
films imported in the form of 35 mm print are required to pay customs duty on
the price of the medium, in cases of digital format the duty is imposed both on
media and content. There
should be exemption from Counterevailing Duty and basic custom duty on colour
films, exemption of film industry from TDS, relief to film industry on remittances
abroad, and tax holiday for 10 years for animation, gaming and VFX industry
In
the case of the print sector, the I&B Ministry wants restoration of the effective
rate of duty to 5.15 per cent on printing machines by withdrawal of the CVD and
SAD imposed on such high-speed machines by which the CVD was earlier withdrawn.
Also, heat-set offset printing machines should continue to enjoy parity on duties
with cold-set machines. Import
CTP equipment, which are not manufactured indigenously, be treated at par with
printing presslines and allowed to be imported at a concessional duty of five
per cent and zero per cent CVD and SAD (effective rate of duty being 5.15 per
cent). Mailroom
equipment should be treated at par with printing presslines and allowed to be
imported at a concessional duty of five per cent and zero per cent CVD & SAD
(effective rate of duty being 5.15 per cent). Consumables
should be treated at par with printing presslines and allowed to be imported at
a Concessional duty of 5 per cent and zero per cent CVD & SAD.
There should
be complete waiver from levy of service tax on haulage of newsprint by rail or
road. | 
