Bollywood and the entertainment sector are disappointed about being left out of the spotlight once again. The industry has been seeking lower entertainment taxes, incentivising foreign film-makers to invest in Indian films and customs duty exemptions on film equipment.
Most of their pleas have been ignored, but the Budget did exempt the service provided by movie theatre owners to the distributor. It also proposed setting up a Centre for Film Production and Animation in the North-East.
Filmmaker Mahesh Bhatt told
The film industry contends that entertainment tax is difficult to comply with, leading to piracy and under-reporting of revenues
Jehil Thakkar, Partner, Media and Entertainment, KPMG, said the sector had a lot of expectations, but the Budget offered very little. The absence of tax incentives and inability to leverage tax losses were impeding expansion and consolidation. “However, the proposed reduction of tax withholding rates on transactions with non-residents for technical services, transponder charges, content licensing, software royalties and so on, from 25 per cent to 10 per cent, is a welcome measure, which will provide some relief to the M&E industry,” he said.
Last week, Bollywood star Shah Rukh Khan had hoped the Budget will have something of benefit to the film industry, which has been reeling under high taxation.
In Maharashtra, where film capital Mumbai is located, various taxes add up to as much as 61 per cent of a film’s budget.
The century-old film industry churns out over 1,000 films annually. By 2016, its revenue is expected to touch $4.5 billion.