KOLKATA: With Covid2019 vaccination programmes being rolled out in the country, the first ray of hope for a normal life shone in the new year. As the government is all set to present the 2021-22 budget today, the Indian Chamber of Commerce expects it could come as an economic vaccine for the derailed Indian economy. Like many other sectors, the media and entertainment industry is also pinning its hopes for a revival on the Union Budget.

KPMG India corporate and international tax partner & head Himanshu Parekh says that after an “off script” year, the M&E industry is riding high on expectations of what Sitharaman has in store for it in her bahi-khata, especially since the finance minister has promised a budget “like never before” this year.

Speaking to Indiantelevision.com, some media experts mention the need for special attention to the print medium. “Print, radio, cinema and event segments need support from this budget to get them back on the path to recovery. Some relaxation on labour code propositions and custom duties on newsprint would be critical for print to recover,” EY India Media & Entertainment leader Ashish Pherwani says. Deloitte India partner Jehil Thakkar also notes the need for lower customs duty on newsprint which was introduced a couple of years ago.

Due to the closure of more than six months and then reopening with a limited seating capacity, the film exhibition industry has been one of the worst hit segments in the wake of the pandemic. Thakkar adds that measures like temporary removal of GST on film tickets or some tax relief for the exhibition industry itself could help to get it back on its feet.

“Theatres and events can benefit from concessional GST rates to get more people into outdoor venues once the pandemic ends. The events segment, which has been hit perhaps the hardest by the pandemic, needs a rethink with a focus on building affordable and efficient infrastructure to enable events of global stature,” Pherwani comments.

One major expectation of the industry is around Equalisation Levy (EL), highlights KPMG’s Parekh. The way the EL provisions are drafted, there are several interpretational issues and ambiguities surrounding them. It would do well for the government to demystify these issues in the budget, he remarks. Another ask by the sector is to reduce the rate of TDS on domestic payment towards non-theatrical rights to two per cent, on par with the TDS rate with respect to sale, distribution and exhibition of cinematographic films, Parekh further adds.

Bodhi Tree Multimedia managing director Mautik Tolia is of the view that the government should do more than just give an impetus to the entertainment sector. Tolia echoes the sentiment, saying that the Centre should see waiving entertainment tax of movie theatres to boost movie viewing. Along with that, he underscores the need for interest free loans to be given to production houses and other service providers to boost employment.

Siti Networks CEO Anil Malhotra observes that there are a couple of issues like removal of AGR for cable operators who provide broadband service too, demand for infrastructure status, right of way that have not been met yet. However, he is not very optimistic that these issues would be resolved during this budget either. Additionally, GST should be rationalised or abolished for cable TV subscribers having Rs 200-250 packages, Malhotra adds.

The benefit of tax losses carry-forward is currently not available for M&E players in cases of consolidation as the definition of industrial undertaking does not include the sector. “In case of amalgamation of companies, provisions should be amended to allow benefit of carry forward of losses to the companies involved in the M&E sector as well. On the GST front, allowing input tax credit on certain expenses relating to production of content and on payment of advance for acquisition of rights would go a long way to improve the working capital position, especially during the ongoing pandemic. Suitable amendments to address the aforesaid issues would act as a much needed vaccine for the M&E sector,” Parekh details.

Among other issues that need the government’s attention in the budget, infrastructure status to the industry, higher FDI limits in digital media, benefits to start-ups in new media have been highlighted by the experts.