NEW DELHI: There may be some relief for the media industry for certain segments in the offing relating to goods and services tax (GST) with the government open to reviewing certain norms.
According to government sources, petitions from the media and entertainment industry has moved the government to review norms relating to sponsorship services by corporates and other bodies where reverse charge mechanism was not allowed.
Reverse charge mechanism (RCM), which is one of the contentious issues raised late last year by some of the TV channels, has now been suspended until 30 June 2018 according to the sources. The government is also looking at instituting a group of ministers (GoM) to look into RCM and its relevance in GST.
GST, which was welcomed by most sections of the Indian business, has, however, resulted in increased paperwork and spends on manpower for most media companies.
Earlier, it had been envisaged that GST --- dubbed as one nation, one tax by the PM Modi government --- would reduce the taxation burden on corporate houses and reduce multiplicity of taxes. It had also been envisaged that taxation on entertainment, cable and DTH services would come down under the GST regime as the entertainment tax levied by states would be subsumed in the GST.
However, after GST was rolled out from April 2018, most companies, including those in the media and entertainment sector, realised that GST compliance came with a price and, subsequently, a few states like Punjab have gone on to levy entertainment tax, which, in a way, has neutralised many of the benefits of GST.
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