ITV

Category: Budget 2015

  • Budget 2015- Returning Indian economy to the path of explosive growth

    Budget 2015- Returning Indian economy to the path of explosive growth

    MUMBAI: With Budget 2015, the entire nation awaits with hope. As Railway Minister, Suresh Prabhu and Finance Minister, Arun Jaitley present the Rail and Union Budget on 26 and 28 February respectively, nearly every economic indicator is favourable – inflation is down, so are crude oil prices, foreign exchange reserves are at a peak and foreign investors are interested again in India’s stock markets.

     

    So, what will Prime Minister Narendra Modi and his team do to return India to the oath of exponential growth?

     

    To decode this much-awaited budget, CNN-IBN and IBN7 will bring rolling coverage on the Rail Budget and Union Budget 26 February (today) and on 28 February, respectively, under the aegis of the specially branded shows Modi Express & The Modi Budget on CNN-IBN and Prabhu Ki Patri & Jaitley Ki Potli on IBN7.

     

    These will be a culmination of a series of pre-budget shows that both channels have been running capturing the mood, expectation and suggestions from a cross-section of individuals from corporate to entrepreneurs to students. With more than 18 hours of live programming on each channel, the network is all set to be the one stop destination for viewers to know everything about the upcoming budgets.

     

    The finest editorial teams of both the channels including Bhupendra Chaubey, Sumit Awasthi, Karma Paljor, Shereen Bhan, Sanjay Pugalia and Anubha Bhonsle will bring budget updates, public reactions and impact assessment.

     

    They will be joined by the country’s most formidable economists and commentators including former member-traffic, railway board SB Ghose Dastidar, Concor/Container Corporation of India founding CMD Raghu Dayal, former additional member, planning, railway board Sumant Chak and Smartwave railway expert / CEO Sanjeeva Shivesh for Rail Budget 2015.

     

    For Union Budget 2015, experts such as India Foundation head Shaurya Doval, Industry and Commerce former secretary Dr. Ajay Dua, former finance secretary C M Vasudev, former chief economic adviser Dr. Arvind Virmani, Sr. Journalist / Columnists Swapandas Gupta and Ashok Malik and former chief economic adviser Dr. Shankar Aachraya will be on-board.

  • On-board entertainment, SMS alerts, Wi-Fi on cards with tech friendly Rail Budget 2015

    On-board entertainment, SMS alerts, Wi-Fi on cards with tech friendly Rail Budget 2015

    KOLKATA: In a 70-minute consumer-focused speech that carried the distinct imprint of Prime Minister Narendra Modi, Indian Railways Minister Suresh Prabhu on Thursday presented a slew of measures that introduced mobile friendly facilities for passengers.

     

    While presenting his first maiden Budget, the minister in Lok Sabha proposed to offer on-board entertainment facilities in the railways on similar lines as provided by some aircrafts. Initially, this on-board entertainment facility would be extended on select Shatabdi trains on a license fee basis.

     

    Additionally, SMS alert services to inform passengers of delay and departure timings for trains is also on the cards. “SMS alert to be introduced for train timings,” said the minister.

     

    In order to give passengers more accessibility and connectivity at stations, the minister also proposed that Wi-Fi would to be made available at 400 railway stations. It should be noted that recently the Delhi railway station got Wi-Fi connected.

     

    Not only this, the government also plans to develop a mobile application to address complaints of people.

     

    Commenting on the mobile alerts, free Wi-Fi and technology friendly Budget, experts said that these applications would be particularly useful in locations where fog season means inevitable delays up to 24 hours and cancellations. “A prior SMS alert system will help ensure that travelers do not end up waiting at the station only to find out that their train has been cancelled. Now people will not mind to travelling by trains,” said an expert.

     

    It should be noted that Prabhu did not talk about the application in details or how the app will help in dealing with passengers’ complaints.

     

    The minister also announced that charging facilities for mobile phones would be extended in all trains and stations. “Mobile charging stations will be introduced in general class coaches,” he said.

     

    Additionally, in order to make ticketing more passenger friendly the Budget also proposed “operation five minutes” for issuing unreserved tickets, hot buttons, coin vending machines, concessional e-tickets for differently-abled travelers, for booking tickets a multi-lingual e-portal will be developed. “Passenger travelling unreserved can procure a ticket within five minutes,” he said.

     

    Prabhu also stated that the government aims to create a multilingual e-ticketing system, which will be encouraging for those might not be comfortable in English.

     

    The Railways is further drawing up comprehensive policy to tap latent advertising potential.

     

    Lastly, a good-Internet linked initiative that was announced was that food can be ordered from the IRCTC website at the time of booking. The minister said that, “E-catering has been introduced on some trains on experimental basis, depending on the response, it will be extended.”

     

    Highlights

     

    • The key themes of the Railway Budget were in line with Prime Minister Narendra Modi’s initiatives – Swachch Bharat Mission, Make in India and Digital India.

    • SMS alert to be introduced for train timings

    • Wi-Fi to be available at 400 railway stations

    • On-board entertainment facility could be extended on Shatabdi trains

    • Mobile charging stations will be introduced general class coaches

    • Passenger travelling unreserved can procure a ticket within five minutes

    • Mobile application to address complaints of people is also being developed

    • Hand-held devices for ticket checkers for moving towards paperless ticketing

    • Drawing up comprehensive policy to tap latent advertising potential

     

    Railway Budget 2015, according to Prime Minister Narendra Modi, is a forward looking, futuristic and passenger centric budget, combining a clear vision and a definite plan to achieve it.

     

    “This is a watershed moment for Railways, marking a paradigm shift from discussing coaches and trains to comprehensive railway reform. I am particularly delighted that for the first time, there is a concrete vision for technology upgradation and modernisation of the Railways. The Railway Budget lays out a clear roadmap to make the Railways the key driver of India`s economic growth, playing a key role in India`s progress. Railway Budget 2015 stands out for its focus on the common man, putting speed, scale, service and safety, all on one track,” the Prime Minister said.

     

    Reacting to the maiden railway budget, Kotak Securities head-private client group research Dipen Shah said, “The first railway budget of Suresh Prabhu sets a vision for Indian railways, striving to make it the prime mover of the economy, once again.”

     

    The prime focus of the minister is in enhancing its operations, targeting operating ratio at 88.5 per cent for FY16 from 91.8 per cent in FY15. “Budget carves out various resource mobilisation routes, moving away from budgetary supports. He has proposed to part-finance the ambitious five-year investment plan of Rs 8.56trn through funds from foreign institutions, pension funds, states, PSUs and PPPs both in form of equity and debt through SPVs. Focus is more on implementation and improving the service quality rather than on big bang announcements. Focus is also on commercial viability as much as it is on social welfare. We believe that, efficient execution of these initiatives will indeed improve the passenger revenues while also attracting more freight traffic to railways,” he added.

     

    According to Shah, while change in freight fares seems cosmetic in nature, no change in passenger fare is welcome move, since fuel cost has come down significantly over the period.

     

    The markets have likely been disappointed by the absence of several big announcements relating to the dedicated freight corridors or other capex programmes as well as finer details on FDI / PPP financing. “However, the focus on effective implementation, improving the operating ratio as well as on new initiatives bodes well for the railways in the long term. We expect the focus on deficit as well as reforms to be reflected in the Union Budget, and we will watch out for the same,” concluded Shah.

  • FICCI pushes for 10-year tax holiday for AVGC industry

    FICCI pushes for 10-year tax holiday for AVGC industry

    NEW DELHI: With the nation waiting for the maiden Narendra Modi government’s Budget 2015, every sector is speaking its heart out with regards to their expectation from the Union Budget.

     

     The entertainment wing of the Federation of Indian Chambers of Commerce and Industry (FICCI) in its wish-list submitted to the Finance Minister Arun Jaitley- who also holds the Information and Broadcasting portfolio, addressed the issues faced by not just broadcast, cable and radio sectors, but also pointed out the changes needed in the cinema and animation sectors.

     

    Cinema

     

    Referring to the film sector, FICCI wants Digital Cinema Services to be included under the Negative List for Service Tax exemption, as this will help the industry, which is struggling against piracy. Digital Cinema service distributors were exempted from Service Tax vide notification of March but with the introduction of the Negative List in Service Tax, this circular got rescinded.

     

    It wants the Government to exempt performing artists from levy of Service Tax, which will help the industry that already suffers from very high rate of indirect taxes in India. Levy of service tax on artists increases the cost of the film producers and distributors, which ultimately gets passed on to the consumer.

     

    On-screen advertising in cinemas and multiplexes may be exempted from levy of service tax as the on-screen advertising within cinemas caters to advertisers with small businesses, with limited resources. The on-screen advertising forms an important source of revenue for the exhibitors, which are already reeling under the pressure of multiple taxes. Until recently, on-screen advertising within cinemas and multiplexes was subject to service tax till 30 June 2012. Since 1 October 2014, the negative list of services has been amended whereby on-screen advertising within cinemas shall be liable to service tax.

     

    There should be a clarificatory instruction on the on applicability of service tax on revenue sharing arrangements for exhibition of films. At present, service tax is levied on revenue of such sharing arrangements for exhibition of films between producers, distributors, sub-distributors, and exhibitors. But the exhibitions of films are carried out on a principal to principal basis and neither party renders any service to another.

     

    Furthermore, Rule 4(a) of the Service Rules 2012 should be amended suitably to include post-production services, as this will provide parity with goods imported for re-export and will promote growth of such services. At present, services performed on the goods temporarily imported for re-export are not liable to Service Tax due to specific provision in POPS Rule. But in case of post-production services such as dubbing, editing, title printing etc. the above rule is not applicable and Service Tax is payable.

     

    FICCI wants reversal of the increased withholding tax to eliminate the differentiation for the transactions with entities in nations having treaties and other entities. This withholding tax rate has a significant impact on payments to be made for acquisition of content. There is a direct impact on companies distributing foreign films in India and Indian films distributed outside India with non-residents with no treaty jurisdictions such as Croatia, Fiji, and Monaco etc. While the withholding rate for transactions with major treaty nations such as UK and US is in the range of 10 per cent to 15 per cent, the rate of 25 per cent is punitive for the same transactions which do not originate from treaty nations. (It pointed out that the Tax on royalty and fees for technical services earned by non-resident taxpayers has been increased from 10 per cent to 25 per cent in the cases where India does not have a Double Tax Avoidance Agreement (‘Treaty’) with the country of service provider.

     

    FICCI also wants a suitable reduction in the existing period of 90 days before end of the financial year (under Rule 9A and 9B of IT Rules) as this will grant relief to assesses whose feature films have incurred losses and have been released for exhibition in the last quarter of the financial year. It said that in certain cases where not all rights of exhibition of a feature film are sold and it is released for exhibition on a commercial basis within 90 days before end of the financial year, the feature film performs poorly and it is exhibited only for a short duration.

     

    Consequently, the film producer may not recover costs. In such cases in view of the prevailing IT Rules, the film producers are unable to claim a deduction of entire production cost and the loss is to be carried forward to the next financial year. Accordingly, such film producers are unable to claim losses in the year the feature film is released for exhibition despite no further scope of income. A similar situation exists in the case of expenditure of distribution rights in view of Rule 9B of IT Rules.

     

    Animation and Special Effects

     

    Referring to animation, special effects (VFX), gaming and comics (AVGC), FICCI wanted a 10-year Tax Holiday for the AVGC industry and lifting of service tax on studios developing original content. It wanted restoration of STPI advantage scheme for AVGC or ITES for another 10 to 20 years and cover/encourage exports as well as IP creation.

     

    It wants animation as one of the priority sectors and said the Minimum Alternate Tax (MAT) applicability for units undertaking Animation work in SEZ should be withdrawn to encourage export of animated contents.

     

    Encouragement should be given to entities through reduced tax rates/incentives for exploitation of self-developed content in overseas markets. Exemptions should be granted to overseas payments to foreign artists stationed overseas from withholding taxes. A 50 per cent reimbursable MDA (Market Development Assistance) should be given for travel and registration fees to international market events and withholding tax on revenues accruing from sales of mobile games in non-India markets as well as removal of withholding tax on the development contracts given to mobile game developers outside India should be removed. Also, there should be removal of withholding tax paid by expats working in India for Indian mobile game development companies. This was because of long gestation period, potential to generate IPs, and potential to generate future stream of incomes.

     

    The Government should consider setting up of co-production fund for a minimum of five years with Rs 110 crore each year with the Children’s Film Society, India, for AVGC. This will help the industry immensely and in the next five years India can boast of over 100 successfully implemented co-productions and shows, which will be extremely strong original intellectual property out of India, one of the strongest libraries establishing and restoring forms of art, culture and creative styles and designs which will be known throughout the globe. India would emerge a true leader in the digital content economy and it will ensure jobs for over 400,000 to 500,000 creative, techno creative and artistic youth of the country in the next five to seven years.

     

    The industry body says the excise duty on local manufacture should be brought down from 12.5 per cent to zero per cent (similar to film and music industry). This will enable CVD to be brought to zero. In addition, the Import duty on consoles (Gaming hardware) should be brought down to zero per cent. This will increase the installed base of gaming consoles to enable the local developer ecosystem to flourish.

  • News channels’ budget special

    News channels’ budget special

    MUMBAI: Will Arun Jaitley successfully meet the expectations of the common man or are the aspirations too high? Will we get new schools and colleges? Will the number of AIMS increase? What will happen to health security? Will medical treatments become more affordable? Will there be any rationalization of taxation?

    The Ministry of Finance will be under the spotlight in the coming days as the country seeks answers to many such questions.

    Indiantelevision.com takes the opportunity to throw a set of questions to various news channels on their plans and offerings to meet viewer’s aspirations.

    ET Now

    The theme for Budget 2015 for the channel is Budget for Achhe Din. “This being the first full-fledged budget from Modi government, the common man’s and various stakeholders’ expectations for achhe din are really high and this perhaps would be the chance for the government to testify the promises made,” says ET Now managing editor R Sridharan.

    With the budget being a highly anticipated event, news channels are gearing to grab as much attention as possible. ET Now is content with the advertiser response. “The response has been phenomenal and we have brought on-board the maximum (and exclusive) budget sponsors within our category. Besides, we have sold out complete inventory on FCT and non FCT elements during budget week and budget day,” adds channels spokesperson .

    Budget also tests the editorial prowess. “All stakeholders of the budget viz. India Inc., market participants, traders, retail investors and the common man would largely depend on us to bring the fastest news updates, analysis, reactions and verdict on the budget,” he says.

    ET Now is looking at providing the most comprehensive and decisive analysis on budget to its viewers. “Every year our budget verdict is closely watched. This year we have a power packed line-up of pre-budget programming named Budget Marathon all through the budget week, which will consist of budget debates, a daily call-in show on personal finance and special editions of our extremely popular show market makers,” he informs.

    So why should one tune into ET Now? Sridharan says, “The sheer depth and expertise of ET Now’s budget coverage will be unmatched as compared to any other English business news channel. Foremost economist Swaminathan Aiyar and Motilal Oswal joint managing director Raamdeo Agrawal will lead ET Now’s programming on budget day. Aiyar, is the most respected economic expert in India who has been analysing budgets for more than 45 years now. In addition to our seasoned anchors, ace fund manager Punita Kumar Sinha will also be part of our stellar line up of experts. With the combined might of these three, the viewers will gain tremendous insights and knowledge ranging from economy, markets, finance and investments.”

    “Each of our experts is a stalwart in his or her area. Be it institutional investors or retail investors, market participants look to our panel to get the most decisive analysis of budget proposals. We have the most authoritative voices on the channel,” he informs.

    NDTV Network

    NDTV, as part of its budget special, will throw all the key questions to find out if the Narendra Modi led government will be able to live up to the expectations of 1.25 billion Indians.

    The channel, through its budget programming, will find out if the growth stimulus is pro-subsidy or pro-investment?

    NDTV senior vice president corporate affairs and senior editor real estate Manisha Natarajan says that the first full budget will be the Modi government’s first real acid test. “Join NDTV as we balance the numbers and find out how Budget 2015 affects you,” she says.

    The programming of the 24 hours English news channel NDTV 24/7 during budget will be as follows:

    Pre-Budget programmes

    23 and 24 February: Budget ADDA at 5:30 pm. In the build up to the Union Budget, Shweta Rajpal Kohli will be joined by the captains of the industry to outline their wishlist for the first proper budget of the Narendra Modi government.

    26 February: Rail Budget Live (12–1 pm): The rail budget presentation will be followed by analysis with railway industry experts and policy makers.

    27 February: Economic Survey Special (9-10 pm). Senior economists, industry voices and policy makers debate and discuss the Economic Survey 2015.

    28 February: Union Budget 2015. Industry and political voices, policy makers and economists join Prannoy Roy and Shweta Rajpal Kohli from 9 am to 3 pm to look at the Narendra Modi government’s first budget.

    9-11 am: Pre-Budget expectations and analysis

    11 am – 1 pm: Budget Speech Live from Parliament

    1-3 pm: Post Budget analysis

    The scheduling of the network’s business channel NDTV Profit is as follows:

    Betting on the Budget: Presented by Prashant Nair, the viewer will get insights into the expectations of the financial markets from the Union Budget. The show will have top-notch market participants who will discuss and debate what the budget can do for the economy and of course for the financial markets.

    B-School Budget: Moderated by Shweta Rajpal Kohli, in this show young business students talk about their perceptions and understanding of the budget and how they might perhaps do it differently.

    Budget ADDA: In the build up to the Union Budget, captains of industry outline their wishlist for the first proper budget of the Narendra Modi government. The show will be anchored by Shweta Rajpal Kohli.

    Programming on Budget Day 

    Name – Union Budget 2015

    Anchors – Vikram Chandra and Prashant Nair

    Timing – 8 am to 5 pm 

    Pre Analysis – 8 am to 11 am 

    Budget Speech – 11 am to 1 pm 

    Post speech analysis – 1 pm to 5 pm 

    News X

    When queried about its special coverage for budget 2015, NewsX editor in chief Rahul Shivshankar says, “NewsX has a new mission for the new NDA government for their first budget – Mission 10 per cent. This is also our branding for the coverage, which will all dovetail into this special theme- how to attain double digit growth for India.”

    NewsX will be breaking the mould with a new virtual gfx (graphics) technology to present the big numbers in the budget.

    Talking about the motto of News X, Shivshankar says, “We believe that one of our primary functions is to ensure that the voice of the common person reaches the newsmakers. We are doing a series of roundtables with experts and opinion makers which will be suggestive of what the government focus for the budget should be.”

    During the budget, viewers tune in to a channel to follow the editorial content. The channel with better content garners more viewership. “NewsX has a detailed roll out plan for budget programming. From 19-27 February, our programming Your Budget, Your Expectations would highlight the expectations of the common person from the FM and PM. From 21-25 February on our budget show Mission 10 per cent at prime time, we will debate on issues like growth, fiscal deficit, tax, growth and aspirations of the youth with eminent panel of experts. From 27-28 February our prime focus will be on the political and economic implications of the Rail Budget and Union budget including Economic Survey. Overall, our editorial focus will be to be non jargonistic, to simplify the numbers and ensure the coverage is detailed yet tailored to the common person,” he informs.

    The panel of experts is a very important part of any presentation and the NewsX panel of experts will have former advisor to PMO Subhashish Gangopadhyay, Vivian Fernandes, former cabinet secretary TSR Subramanian, economist BB Bhattacharya, founder Air Deccan/Industrialist Captain Gopinath, senior journalist MK Venu, convener economic cell BJP PN Vijay, direct tax expert KPMG Prashant Kapoor and personal tax expert KPMG Ashish Gupta.

    When asked why should people choose NewsX over others Shivshankar replies, “For clarity. It’s as simple as that. We put the viewer before the numbers.”

    Times Now

    Times Network’s 24 hours news channel Times Now has named its special coverage Super Budget in concurrence with the theme that this budget will perhaps be a kick-starter for the next phase of growth.

    “Super Budget 2015 will be a congregation of debate shows, interviews, analysis and discussions with Times Now editor in chief Arnab Goswami and economists like Omkar Goswami, Lord Meghnad Desai, Dr. Rajeev Kumar and Sunil Alagh who will discuss issues regarding the common man’s expectations from the budget 2015,” says a Times Now spokesperson.

    The channel is known for its innovative adaptations, as during every special presentation it comes with a new technical innovation. The budget will be another effort to showcase innovate formats both in terms of technology and editorial styles.

    When questioned about the impact of budget presentation in news channels, the spokesperson asserts, “The budget is a crucial exercise that plays a key role in determining not just the economy but also impacting our lives. Viewers watch news channels for information around the budget, how the subject matter experts are reacting to the budget and how the budget will impact our life. Times Now tries to simplify the budget by analyzing it in simple terms bereft of jargons.”

    The channel will continue its strategy of bringing the budget to its viewers in a simple and understandable form. “We will be analysing how the budget will impact our daily lives and the impact it will have on corporate and the markets. With a range of experts from industry the analysis is aimed to be sharp and fast with path breaking graphics to support the same,” he adds.

    With all the news channels having more or less the same presentation, it is highly challenging to emerge as viewer’s choice. “In all budgets, Times Now has been the choice of viewers. We have managed to garner record shares in each budget. With a team that comprises two of India’s best voices on economics in Dr. Omkar Goswami and Lord Meghnad Desai, the channel promises to deliver sharp analysis. Additionally experts like Dr. Rajiv Kumar, Sunil Alagh and Sanjeev Sanyal will provide industry viewpoints to the budget. All this packaged in an interesting format makes for exciting viewing,” reiterates the spokesperson.

    Ad rate hike

    According to media buyers, the news channels will see a minimum hike of 50 per cent in the ad rate. A media executive says, “Budget is one of the major event for news channels and they prepare special marketing campaigns for it so that brands come and endorse.”

    Another executive from the media planning community adds on condition of anonymity, “The hike in ad rate is directly proportional to content in store. Better content delivered by prominent dignitaries grabs more attention and hence the channel get better price for their ad slots.”

    Though economic reform is a 365 days agenda, the general budget plays a vital role in the economic condition of the country. It remains to be seen if budget 2015 takes India, which was recognised as ‘fragile five’ couple of years back, one step forward towards the fantastic or favourite five in global economy.

    (The channels are listed in alphabetical order and not on the basis of viewership ratings or accolades.)  

  • Infrastructure status for b’cast industry, reduce customs duty on STBs: FICCI budget wish-list

    Infrastructure status for b’cast industry, reduce customs duty on STBs: FICCI budget wish-list

    NEW DELHI: The Broadcasting industry should be granted infrastructure status to push the digitisation agenda of the government. 

     

    In its wish-list submitted to Finance Minister Arun Jaitley – who also holds the Information and Broadcasting portfolio – the entertainment wing of the Federation of Indian Chambers of Commerce and Industry (FICCI) said that in the present era of convergence, the distinction between Telecom, IT and Broadcasting sectors is getting blurred. 

     

    The Telecom sector is already treated as “infrastructure service” and so giving the infrastructure service status to broadcasting will provide a level playing field to the sector.

     

    Broadcasters and distributors will be aided with better and affordable financing options in the very capital intensive growth phase. 

     

    The FICCI wish-list covers television and radio broadcasting, cinema and animation and gaming, apart from suggestions relating to advertising in the media. 

     

    At the outset, FICCI says the Indian media and entertainment industry grew from Rs 821 billion in 2012 to Rs 918 billion in 2013, registering an overall growth of 11.8 per cent. Given the impetus introduced by digitisation, continued growth of regional media, new government formation, strength in the film sector and fast increasing new media businesses, the industry is estimated to achieve a growth rate of 15.3 per cent in 2014 to touch Rs 1059 billion. The sector is projected to grow at a healthy CAGR of 14.2 per cent to reach Rs 1786 billion by 2018. 

     

    Television clearly continues to be the dominant segment, but strong growth has been posted by new media sectors, whereas gaming and digital advertising recorded a strong growth of 25.5 per cent and 38.7 per cent compared to the previous year. The music sector has shown a decreasing growth (-9.9 per cent growth in 2013 over 2012 compared to 18 per cent growth in 2012 over 2011) despite strong content and digitisation.

     

    Radio is anticipated to see a spurt in growth after the roll-out of Phase III licensing. The benefits of Phase I cable digital access system (DAS) rollout, and continued Phase II rollout are expected to contribute significantly to strong continued growth in the TV sector revenues and its ability to invest in and monetize content. 

     

    The sector is expected to grow at a compounded annual growth rate (CAGR) of 18.1 per cent over the period 2013 to 2018.

     

    Set Top Boxes 

     

    It said the expected investment in set top boxes alone is around Rs 20,000 to Rs 25,000 crore and therefore wants the customs duty levied on STBs to be on the transactional value and not the maximum retail price. Basic customs duty should be reduced to five per cent if not zero per cent as this will help push digitisation faster, which would lead to transparency which will result in manifold increase in the tax revenues from Service Tax, Entertainment tax and Income-Tax. 

     

    Television Sector

     

    Referring to tax withholding on Transponder hire charges (Section 9(1)(vi) Explanation 6 of Income Tax Act, 1961), FICCI pointed out that the Finance Act 2012 amended the section to retrospectively include payment for transponder hire and other charges as royalty. However FICCI wanted a clarification to be issued that Transponder hire charges are not “royalty” as Courts in India have held that such charges are not ‘royalty’ or ‘Fee for Technical Service’ (FTS). The law was retrospectively amended to nullify the effect of the judicial decisions. This is an artificial deeming provision hurting industry. These are standard services and no transfer of technology. OECD commentary also does not treat such payments as “royalty” or “FTS”. 

     

    On tax withholding rate on Royalty (Section 115A (1) (A) & (B) of Income Tax Act, 1961), FICCI said the Finance Act 2013 increased withholding rate from 10 per cent to 25 per cent. However, it wanted that the 10 per cent withholding rate should be restored as most of the Tax Treaties have 10 per cent or 15 per cent rate and most of the contracts are on ‘grossed up’ basis leading to 37 per cent tax burden on Indian payer. This assumes almost 100 per cent profit on the payment at current corporate tax rate and is absurd, says FICCI. The change will also reduce the cost to Indian business/consumer and would benefit Broadcasting, DTH and HITS sectors. 

     

    Section 72A of the Income Tax Act 1961 allows carrying forward of losses in case of amalgamation or merger for service industry. Currently, all industrial undertakings in the Manufacturing, Software, Electricity, Telecom, etc. sectors are allowed carry forward of losses in case of merger /amalgamation, but the services industry undertaking in general is not allowed such carry forward. Section 72A(7)(aa) should be amended to include Broadcasting, Media and Entertainment sector if not all services sector undertakings to ensure a level playing field with other services industry like Telecom, Software etc. as this will encourage consolidation for rapid growth.

     

    Credit under the ‘Served From India Scheme’ under the Foreign Trade Policy is currently available as set off against excise and customs duty liability and the period of utilisation of SFIS credit is two year and is not transferable. Therefore, the SFIS credit should be allowed as set off against Service Tax liability in addition to Excise and Customs Duty liability. SFIS credit should be made transferable or tradable outside the group entities similar to DEPB scheme. The period of utilization of SFIS credit should be increased from two to five years. FICCI says that for the purpose of CENVAT credit, there is no distinction between Service Tax and Excise duty and not all companies have import requirement and thus the benefit of the scheme is not really received by such company. Making SFIS credit transferable will give level playing field with DEPB and other incentives schemes.

     

    Doordarshan 

     

    FICCI wants Doordarshan to launch DD Kids, a channel dedicated to kids’ content in “digital terrestrial” space as it would promote intellectual property creation in India in the field of animation and other content for children. 

     

    Radio 

     

    Referring to radio, the industry body said it wanted reduction of customs duty on radio broadcasting equipment to four per cent especially on transmitters, consoles etc which are not produced in India. It said there is no justification for the high CVD and additional CVD being charged and India has one of the highest import duty rates for transistors. 

     

    It wanted a removal of the service tax on advertisement in radio since it competes with newspapers at local level even though there is no service tax on advertisement on newspapers. This will also provide a level playing field to radio. 

     

    Referring to FM Radio Phase III, FICCI wanted assistance to raise money, provide priority Provide tax holiday for five years for new capital investment in Phase III and provide a fiscal sector lending sector status so that radio industry is able to access easier availability of finance at with lower interest rates. This was because a large amount of capital is required for the roll out of phase III of FM radio privatization.

  • IBN7 gears for budget with ‘BK’

    IBN7 gears for budget with ‘BK’

    MUMBAI: Amidst high expectations of investors in India and globally, key stakeholders are now hoping for the next leg of reforms to be revealed in the upcoming Union Budget. The economy is on the path of recovery – will Budget 2015 give it further impetus? Will the common man benefit? What will be the impact in areas that affect the common man such as housing, inflation, commodity prices etc.? As the euphoria continues around the ‘Modi wave’, and the new government gears up to present the first full budget on 28 February, IBN7 has lined up a series of special pre-budget programme that will analyse and identify the expectations of people from the budget.

     

    The pre-budget series will have a special character BK (Budget Kumar) who will draw attention to the issues and concerns of the people and bring it to the attention of the Finance Minister. BK will stamp his own unique style on the show – adding a different dimension to the channel’s budget programming. Owing to the common man’s perspective, Union Budget 2015 will be a test on the promise of good times by the Modi government. IBN7 will present a unique way of understanding the nation’s expectations by becoming one of them. BK will leave no stone unturned to bring forth the voice of the common man and his / her hopes from our elected government.

  • “Govt. should reconsider extending excise duty concessions to consumer durables”: Anirudh Dhoot

    “Govt. should reconsider extending excise duty concessions to consumer durables”: Anirudh Dhoot

    MUMBAI: With the government of India deciding to withdraw the sops offered to the consumer durable industry, the move has come as a shocker to the sector.

     

    Commenting on the decision taken by the government, Videocon director Anirudh Dhoot said, “The Indian government’s decision to not extend excise duty concession has come as a setback to the consumer durable industry.”

     

    Dhoot further requested that the government should reconsider the increased excise duty sops in the upcoming budget as it will give a boost to manufacturing and bring revival to the sector.

     

    Speaking about Prime Minister Narendra Modi’s highly anticipated and pet project, ‘Make in India’ campaign, Dhoot said that the country was capable enough to hold up the “Make in India” campaign. But going further he cautioned that in order to achieve this vision, the foremost action was to formulate policies and grant infrastructural support favouring electronic components and panel manufacturing in India. Dhoot’s Direct To Home (DTH) company Videocon d2h is also into the manufacturing of indigenous Set Top Boxes (STB).

     

    “We expect better guidelines and framework that strengthens consumer durable industry and benefits homegrown produce from this budget,” Dhoot added.

     

    On a concluding note Dhoot feels that at an overall level, the Union Budget needs to adopt a pragmatic approach towards addressing the needs of the consumer durable sector to manage its fiscal position. “This can take India back to a higher growth trajectory,” declared Dhoot.

  • DTH Operators’ Association sends wish list to the MIB ahead of Budget 2015

    DTH Operators’ Association sends wish list to the MIB ahead of Budget 2015

    MUMBAI: Ahead of this year’s Union budget, the Direct-To-Home (DTH) Operators’ Association of India has sent its wish list to the Ministry of Information and Broadcasting (MIB) asking for infrastructure status to be granted to the sector, amongst other demands.

     

    Speaking about the details mentioned in the letter, DTH Operators’ Association president and Dish TV CEO RC Venkateish spelled out the top demands. “One, we have asked for the service tax for DTH services to be put in the negative list of service tax. We have also asked for reduction of withholding tax on satellite from 25 per cent to 10 per cent. Thirdly the sector has demanded for infrastructure status for the DTH sector. Fourth, the letter mentions that license fee needs to be brought down from 10 per cent to eight percent adjusted GR. Finally, we also asked for content cost to be passed through by effectively asking to bring it down to six per cent on GR,” he said.

     

    The letter also seeks lowering of duties on digitals set top boxes (STB). The previous ministry under the UPA government had suggested scaling down the license fee from 10 per cent to six per cent. “While the previous government didn’t take any action, we hope the new government will definitely will,” Venkateish concluded.