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Tag: entertainment tax

  • MCOF gets entertainment tax extension in Maharashtra

    MCOF gets entertainment tax extension in Maharashtra

    MUMBAI: The last mile operators (LMOs) in Maharashtra have got a further extension until 21 January from filing joint affidavits along with the multi-system operators (MSOs). The cable operators can also in the interim continue paying entertainment tax to the Bombay High Court, following an extension given by it today. The next hearing of the case is on 21 January.

    The Maharashtra Cable Operators Federation (MCOF) had on 13 December moved the Court challenging the Maharashtra state government’s amended gazette resolution (GR) regarding entertainment tax. According to the amended GR, it was mandatory for the LMOs to file a joint affidavit with the MSOs while paying entertainment tax.

    The Court during the 17 December hearing gave interim relief to the LMOs from filing joint affidavits along with the MSOs. The case was up for hearing today. “The state government advocate wasn’t ready with its response and hence the case was adjourned to another date,” says advocate Sudeep Nargolkar.

    While the case is still on in the Court, the public accounts committee (PAC) of the Maharashtra state legislature has come up with the recommendation of bringing in a few amendments in the Entertainment Duty Act, 1923. The amendments have been recommended based on: one, the numerous advertisements running on cable TV networks, which according to a Times of India report runs into crores; and two, while private TV channels need to follow procedures and seek permission from the Telecom Regulatory Authority of India (TRAI) before launching a new channel, there is no body governing the channels that the cable TV operators run.

    The committee has also objected to the absence of tax that should be levied on cable TV operators for running advertisements on their network.

    The PAC has suggested measures to increase the revenue from entertainment tax. This includes: creating a database of cable and DTH viewers; decentralising entertainment tax collection at district and taluka levels; and regular inspection by both the IT department and revenue officials to find out the number of cable TV subscribers under each operator.

    The changes are being thought of at a time when the LMOs are fighting against the high entertainment tax fees.Are we in for another round of litigation? 

  • Film industry wants entertainment tax to be subsumed in proposed GST

    Film industry wants entertainment tax to be subsumed in proposed GST

    NEW DELHI: The Film Federation of India has appealed to the Government that entertainment tax imposed by states and local bodies should be subsumed in the proposed Goods and Services Tax (GST).

    On its budget proposals to Finance Minister P Chidambaram, the FFI has said that the service tax on performing artistes should also be done away with.

    In the memorandum submitted to the Ministry, the Federation says the condition on filmmakers to fill a form under Section 52A of the Income Tax Act for all payments above Rs 50,000 should be confined to only cash payments.

    The Federation says the sale, distribution or exhibition of cinematographic films, not regarded as royalty under 9(1)(vi) of the Income Tax Act 1961, is nullified as it is not available under the Direct Tax Code 2010. As it is not regarded as royalty, it does not attract the 10 per cent with-holding tax under Section 194J of the Act. An amendment should, therefore, be made to exclude this from the Code.

    The exemption to digital conversion – and supply to cinemas – may be put in the Mega Exemption List.

    The exemption in customs duty provided for certain goods under the ATA Carnet (a uniform law applicable in 71 countries including India) does not include film equipment. As a result, it discourages foreign filmmakers from coming into India to shoot here. This should be amended to include film equipment so that more filmmakers come into India to shoot. This would also encourage the tourism and related industries.

    Many Indian studios are hired by foreign filmmakers for post-production work. But under the Place of Provision of Service Rules 2012, only material brought in for repairs, reconditioning or re-engineering are covered. The Federation says that post-production is also in many ways repairing and reconditioning, the Rules should be amended to cover post-production work undertaken by Indian studios for foreign filmmakers.

    Cinema theatres and digital distribution should not be subjected to service tax for Business Support Services, the Federation has said.

    Similarly, the service tax on renting of immoveable commercial properties should not include cinema houses or multiplexes.

    The services rendered by a digital cinema distributor were earlier exempted from service tax by the CBEC in March 2007. However, the introduction of the negative list-based service tax did not cover this. The industry, therefore, wants that the exemption of service tax in this regard should continue.

    Meanwhile, Dun & Bradstreet Information Services India Pvt. Ltd has in its pre-budget demands sought a unified tax structure rationalising multiple levies can ease compliance and reduce the existing tax burden from the industry. The media & entertainment industry is presently subject to a host of taxes like service tax, VAT, entertainment tax etc.

    It has also sought more clarity on the potential levy of service tax as well as VAT on activation charges and recharge coupon vouchers is expected.

    Moreover, to enhance digitisation of electronic media, the industry expects abolishing/reducing the import duty on set top boxes. This will also result in reduction of capital expenditure for cable / DTH companies.

    At present, the income tax act considers the subscription revenues earned by the foreign telecasting company as royalty or business income. The income from grant of distribution rights is in the nature of business income and not copyright. Hence, such payments should not be considered as royalty.

  • Maha Govt. Hikes entertainment tax on multiplex tickets

    Maha Govt. Hikes entertainment tax on multiplex tickets

    MUMBAI: The Maharashtra government on Wednesday announced additional entertainment tax of 10 to 20 per cent on multiplex tickets priced above Rs 250.

    The step followed complaints that multiplex owners arbitrarily hiked ticket rates of blockbuster movies.

    On a ticket costing Rs 251 to Rs 350, the additional entertainment tax will be 10 per cent, for tickets priced between Rs 351 and Rs 500, the additional tax will be 15 per cent more and for tickets priced Rs 501 and above, it will be 20 per cent.

  • Entertainment tax relief for Krishna aur Kans

    Entertainment tax relief for Krishna aur Kans

    MUMBAI: 3D animated feature film Krishna aur Kans has been declared tax-free in six states including Maharashtra.

    Produced by Reliance Animation, the film, which released on Friday, has been declared tax-free in Punjab, Rajasthan, Kerala, Chhattisgarh and West Bengal.

    Other states like Delhi, Uttar Pradesh, Haryana, Karnataka, Gujarat, Andhra Pradesh, Tamil Nadu and Madhya Pradesh are also considering the proposal.

    “We are thankful to all the state governments for such overwhelming support towards the film for the cause. We want every family in our country to celebrate Janmashtami with ‘Krishna aur Kans‘ and enjoy the adventures and pranks of their favourite Krishna,” said Reliance Animation CEO Ashish Kulkarni.

    Krishna Aur Kans is the story of Lord Krishna and the brutality of Kans. It highlights Krishna’s birth and his victory over Kans. “We’ve watched many animated films revolving around the Gods in the Hindu mythology but this one takes Hindi 3D animation to a new level,” the CEO observed.

    The film has voiceovers by Juhi Chawla, Manoj Bajpayi, Om Puri, Prachi Save, Anupam Kher, A.K. Hangal and Mukesh Khanna.

    “Schools across the states have started doing block bookings of the shows for their students. Even corporate, social groups and clubs in various cities across the country have done block bookings for their employees and members. Also, religious organisations have made bulk bookings,” Kulkarni said.

  • Multiplex owners demand uniform entertainment tax

     
    Multiplex owners demand uniform entertainment tax
     

    MUMBAI: The multiplex owners in India are looking forward to uniformity of entertainment tax in the union budget 2008-09. The other things they are insisting on are decrease in service tax on lease rentals.

    “The rates of entertainment tax are amongst the highest in the world. Most states levy an entertainment tax ranging from 30 to 50 per cent of ticket sales. The average rate of entertainment tax across the world is around 10 per cent of ticket sales,” said E City Ventures (Fun Republic) MD Atul Goel.

    Multiplex owners are awaiting abatement of 67 per cent for service tax on rent so that effective tax rate reduces to 4 per cent.

    They feel as the high rate of entertainment tax still exists, the domestic cinema exhibition industry also pays sales tax on food and beverage. Multiplex owners say that they are forced to pay multiple taxes which include property tax on real estate that it occupies, service tax on advertising revenues, show tax on the number of shows held and income tax on net profits.

    Cinemax India CFO Jitendra Mehta says, “We await abatement of 67 per cent for service tax on rent so that effective tax rate reduces to 4 per cent.”

    Echoing Mehta, Goel adds that the service tax introduced on lease rentals for cinema exhibitions will virtually kill this industry, and, in turn, the entire film industry. He thinks that the entertainment tax structure needs to be re-looked to benefit the overall cinema infrastructure.

    Multiplex owners are demanding a one indirect tax regime. They insist that indirect taxation of goods and services should be integrated into the Goods and Service Tax (GST). Besides entertainment tax on cinema tickets should be integrated into GST.

  • Trai pitches for duty slash on STB components, seeks removal of entertainment tax on cable TV

     
     

    NEW DELHI: The Telecom Regulatory Authority of India (Trai) has take up the demands of stakeholders in the broadcasting industry and recommended to the Finance Ministry that there is a need for tax rationalisation. The chief amongst which is abolishing of customs duty on import of components for the local manufacture of STBs.

    MSO sources tell indiantelevison.com that Trai has suggested to the ministry that it should ensure a level playing field in the interest of digitalisation of cable television, which has seen increased demand after the rollout of Cas.

    For the benefit of the consumers, Trai has also suggested that Entertainment Tax be abolished from the cable TV sector.
     

    Trai has argued, as the MSOs had desired, that this is the only industry in which both service tax and entertainment tax are levied, the latter going to the state governments, and suggested that instead of the extra entertainment tax burden, there should be evolved a system of sharing a part of the service tax with the state governments.

    These sources say also that Trai has for the first time written to the government of the reports the industry has been filing since the middle of January this year, that after Cas rollout, the interest in digitalised TV has vastly increased, and Trai says that there are requests from areas not covered under mandatory Cas for the same system being introduced.

    The issues were discussed in a roundtable between Trai, the MSOs and other stakeholders earlier this month.

    Trai has written to the government, sources requesting anonymity tell indiantelevision.com, that the stakeholders desire rationalisation of tax structure, because greater convergence in broadcast and telecommunication technologies in the near future would result in the distinction between the two services getting increasingly blurred.
     

    Hence the need for a level playing field, which in turn could not be brought about without required rationalisation of taxation in the two sectors.

    Trai feels that the current additional customs duty of 4 per cent on components of set top boxes and associated items like viewing cards should be abolished, just as has been done for the components and parts of cellular phones and mobile phones.

    The Trai wishlist sent to the MoF, sources say, recommends the complete removal of basic customs duty on imported digital headend equipment from the present 12.5 per cent, to improve penetration in the country as a whole.

    Trai says this is quite in line with the abolition of duty on import of STBs done in 2006.

    The MSOs say that they had desired that though excise duty is currently levied on the transaction value of STBs, which are sold as packaged commodity, in the same manner as mobile phones, televisions and cameras, but wherever required manufacturers may be given the option for the scheme on which excise duty is levied on the basis of MRP, with an abatement of 40 per cent.

    Presently, this is applicable to other packaged commodities, and Trai has sent this as part of the recommendation to the ministry as well.

    In consonance with the wishes of the MSOs and other stakeholders, Trai has also suggested that the telecom department has demanded reduction of excise duty on telecom equipment to 8 per cent, and this same should be applicable to manufacture of STBs.

    The stakeholders had told Trai that this would be necessary because with greater convergence of technologies, it would be tough to distinguish between the services.

    There is another tricky issue on excise duty. MSOs say that the premises of the subscriber where the set top box is deployed should be treated as the extended premises of the service provider and the STBs at the premises of the subscriber be treated as the possession of the service provider.

    This would enable them to avail a set-off of excise duty paid, against its service tax liability.