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Broadcasters bat for parity with print medium under GST

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NEW DELHI: The Indian Broadcasting Foundation (IBF) today urged the government to level the playing field under the proposed GST regime for “all mediums”, including electronic, radio and print, as businesses across sectors had taken a hit due to demonetisation of high value currency notes November last.

In a statement put out on Friday, the IBF, which is dedicated to the promotion of television broadcasting in and from India as an organisation, exhorted the government to treat broadcasting community at par with the print medium.

“Just like the print media that has been clamouring for a zero rating of newspapers under the new GST regime, fuming under mass retrenchment and closing down of various editions, the electronic and the radio media, though bleeding under cancellations of advertisements (of) over Rs. 2000 crore (Rs. 20 billion) have requested the government to treat them at par with the print counterpart as they cater to imparting of not only news, entertainment, but also help educate the masses,” the statement said.

The IBF statement comes a day after Minister of Information and Broadcasting M. Venkaiah Naidu directed his ministry’s top official, Secretary Ajay Mittal, to examine various concerns raised by the print media players, including the tax regime that would be ushered in under the proposed Goods & Services Tax (GST), wages in the sector and the way government hands out advertising business to newspapers and magazines.

President of IBF, representing broadcasters in the country with more than 400 channels and 90 per cent of viewership in the country, Punit Goenka said, “It is important that the government recognises TV services, which has evolved over the years as a product/service of mass consumption, to be classified and categorized under the item of mass consumption having a GST rate of 5 per cent so that it becomes affordable to masses.”

Goenka further added: “Going by the number of TV households, which stands at 120 million, we submit to the government that broadcast services, that is, TV and radio, must be treated at par with the print (medium) in the new GST regime. This submission is based entirely on the fact that TV services have become integral part of everyday life of the vast majority in the country and the general economic downturn globally has impacted the sector extensively.”

According to MIB data as on 31 December 2016, there are 899 licensed TV channels in the country of which 399 are news and current affairs channels, while 500 fall under the non-news and current affairs category. Building on this data, IBF highlighted that while many news channels had shuttered or are doing so, some others were downsizing to cope with falling revenues --- a fall out of shrinking advertising revenue following demonetisation --- and rising infrastructure and contest costs. “It seems that many (TV channel) licenses would get either get cancelled or submitted (back) voluntarily by the stakeholders,” IBF warned.

Pointing out that the rates of DAVP advertisements (the government body that hands out government ads to media), which all broadcasters have to mandatorily carry on their networks, have remain unchanged since 2010, Sony Pictures Networks India president, network sales and international business Rohit Gupta said, “The rock-bottom rates are not at all in keeping with the existing market rates and allows little flexibility to carry out businesses.”

Dwelling on the impact that rising costs can have on smaller TV channels’ investments in content, which can have “cascading” effects on viewer choice, Zee Entertainment president, legal & regulatory, A Mohan said, “We urge the government to free the media, print, television and radio (mediums) from obsolete taxation squeezes and attacks on revenue streams, as the vitality of this industry is essential to protect the fibre of the country, both socially and economically.”

The IBF statement, which cautioned government against job losses and disruptions in the vibrant Indian media industry, advocated non-stifling tax regime that can reflect in the upcoming Budget 2017.

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