IBF seeks infrastructure status for broadcasting industry

Other demands include permission to carry forward losses in case of amalgamation/merger and reducing custom duty on set-top boxes among others

BestMediaInfo Bureau | Delhi | January 7, 2016

The Indian Broadcasting Foundation (IBF) yesterday urged the Union Government to grant infrastructure status to the broadcasting industry, including DTH and Cable sectors, to push the digitisation agenda.

At a pre-Budget consultation meeting, chaired by Union Finance Minister Arun Jaitley, IBF pointed out that the expected investment in STBs (set-top boxes) and optical fibre network alone would be Rs 25,000 crore to Rs 30,000 crore.

“In the present era of convergence, distinction between telecom, IT and broadcasting sectors is getting blurred. Telecom is already treated as an infrastructure service. Broadcasters and distribution platforms will be aided with better and affordable financing options in the present capital-intensive growth phase if broadcasting sector is accorded infrastructure status. This will also provide a level playing field to the broadcasting sector with telecom and ISP industry,” IBF Secretary General Girish Srivastava said at the high level meeting.

IBF also urged the government to reduce customs duty on STBs to 5% from the current 10%. “The Finance Act, 2013 had increased customs duty on STBs to 10% from earlier 5%. In order to push digitisation, customs duty on STBs should be reduced to the earlier level of 5% if not entirely removed,” Srivastava said.

On the direct tax front, IBF urged the Finance Ministry to allow carry-forward of losses in case of amalgamation/merger. “Currently all industrial undertakings in manufacturing, software, electricity and telecom sectors are allowed carry forward of losses in case of merger/amalgamation. Media and Entertainment industry should be granted a similar status by amending Section 72(A)(7)(aa) of the Income Tax Act,” IBF said in its presentation.

Another proposal presented by IBF related to tax withholding on transponder charges. Finance Act, 2012 retrospectively included payment of transponder hire and other charges as royalty. However, these are not regarded as royalty under DTAA definition of royalty. IBF requested the Ministry of Finance that the definition of royalty under the Indian Income Tax Act and Treaty (DTAA) be aligned so that the credit of withholding tax is available to the foreign satellite service providers.

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