Bollywood eyes better tax deal
Himalayan News Service
Mumbai, February 19:
India’s flourishing entertainment industry expects the upcoming general budget to slash import duty and change the taxation structure to help it emerge as a global hub for quality content production.
Industry representatives say the government must give some preferential treatment in the annual fiscal package to the entertainment sector that has the potential of earning billions of dollars in foreign exchange.
Indian finance minister P Chidambaram will present the general budget for the fiscal year 2005-06 to parliament on February 28.
“The Indian entertainment sector has massive potential and it is likely to become one of the main catalysts for economic growth in the years ahead,” said Bhuvan Lall, chief executive officer of Lall Entertainment. Lall Entertainment is a privately held company with business interests and expertise in production and distribution of animation, broadcasting and cinema content globally.
“The government must create an environment by offering some financial incentives so that the industry can realise its potential. We are expecting the budget to take a few steps in this direction,” Lall said.
According to Lall, the budget must bring down the customs duties imposed on import of broadcasting and filming equipment from an average of between 25 per cent and 45 per cent to minimum possible levels.
“Also, the entertainment and service taxes imposed on the industry are not very rational and should be done away with immediately. The sector should be given at least five years of tax exemption to help it grow,” he said.
“Currently, the high duty and tax barriers make our products very uncompetitive in the global market. We are at a very critical growth phase and we need government support to become one of the leading global players.”
The Indian entertainment industry’s revenue touched Rs 218 billion Indian Currency (IC) in the last calendar year and is likely to grow by 20 per cent over the next few years to touch Rs 595 billion IC by 2010, says management consultancy firm KPMG.
The film industry revenue is also likely to increase to Rs 143 billion IC by 2010, up from Rs 59 billion IC logged in the last calendar year.