NEW DELHI / MUMBAI: It was the royal ignore for the second year in a row for the entertainment sector. Finance minister P Chidambaram, while presenting Union Budget 2005-2006 in Parliament today, had practically nothing to offer the industry.
The only mention made in the budget to the media sector as a whole was the announcement of reduction in customs duty for printing press equipment.
The Finance Minister announced that credit for counterveiling duty (CVD) will be available against payment of excise duty. However, IT software is proposed to be exempt from the proposed CVD.
Noting that the services sector accounts for about 52 per cent of the GDP, the FM expressed the necessity to cast the net wide and to include some additional services in the service tax net, while retaining the 10 per cent service tax limit.
This means that cable ops and the cable industry would continue to be taxed, which, of course, is being passed on to consumers.
However, as a relief to small service providers, Chidambaram proposed to exempt from service tax those service providers whose gross turnover does not exceed Rs 400,000 per year.
Multiplexes under service tax net
One area where the budget has dealt a negative blow is to the booming multiplex industry (in which players like Zee Telefilms, Adlabs and Shringar two name just three are major players). Multiplexes have been brought under the service tax net.
Says E-City (Zee Group CMD Subhash Chandra’s multiplex intitiative) CEO Atul Goel, “The multiplex business will be adversely affected as construction activities have comer under the service tax ambit. Besides, we had sought certain concessions, which the budget is silent about.”
A visibly disappointed Federation of Indian Chambers of Commerce and Industry (Ficci) additional director entertainment Siddhatha Dasgupta commented, “While all the other other sectors have got something or the other, the budget has nothing to offer the entertainment industry.”
