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IBF demands ‘infrastructure status’ for broadcast industry

The broadcasting foundation submitted its wish list to Finance Minister Arun Jaitley during pre-budget consultations in New Delhi on November 26

BestMediaInfo Bureau | Mumbai | November 29, 2016

ibf-logoIn a recent pre-budget consultation with Finance Minister Arun Jaitley, the Indian Broadcasting Foundation (IBF) put forward a set of demands on behalf of the broadcast industry.

IBF demanded ‘infrastructure status’ for the broadcast and content distribution sector to realise the mission of ‘total digitisation’ in the country. The consultations were held in New Delhi on November 26.

Punit Goenka Punit Goenka

Punit Goenka, President, IBF, said, “I am happy to learn that IBF had good discussions with the Finance Minister and other key officials on some of the key issues related to the broadcasting sector -- both from policy and tax perspective. Grant of infrastructure status for broadcasting and content distribution sector was one of our key demands during the discussions. Once infrastructure status is granted, broadcasters and distribution platforms will be aided with better and affordable financing options in the very capital intensive growth phase to realise the mission of complete digitisation in country.”

During the pre-budget discussions, Girish Srivastava, Secretary General, IBF, said, “The broadcasting and content distribution infrastructure like telecom is important infrastructure for the country. Besides delivering digital television signals, it can be effectively used to deliver broadband services and effectively contribute to the e-Governance initiative of the government. Once the addressability is introduced by way of digitisation, broadcast services are likely to contribute substantial revenue in the form of GST and other taxes to the state exchequer because of the transparency associated with the digital content distribution services.”

On the tax front, key concerns raised were related to extending the benefit of the carry forward of losses in case of amalgamation or merger for the broadcasting sector under section 72A as is being extended to telecom, software and ISP services. Then there is the issue of taxability in the hands of shareholders in case of amalgamation of a foreign company holding shares in Indian company into another foreign company. Other issues include provision of lowering the outer limit in processing of returns, reduction in MAT rate, resolving the long standing issue of tax withholding on transponder hire charges etc.

A Mohan, President, ZEE Network, said, “Once our key demands raised on the tax and regulatory front such as grant of infrastructure status, 72 A benefit, MAT rationalisation, transponder royalty, TDS rationalisation, etc., are addressed by the government, it would be a good example in the direction of ease of doing business in country.”

Mohan added, “Television has become an integral part of everyone’s life and has attained a status akin to ‘essential services’ as it is an important tool for dissemination of information and entertainment to masses. Accordingly, broadcasting and distribution services should be subjected to a lower rate under GST regime as is applicable to essential services, to make them affordable to the masses.”

On the issue of taxability in the hands of shareholders in case of amalgamation of a foreign company holding shares in Indian company into another foreign company, Sanjay Jain, CFO, Star India, said, “The government should issue an amendment to the provisions to the Act to specify that similar exemption is available to shareholders as well on a high priority. The purpose of allowing merger of foreign companies would be defeated without extending similar exemption in the hands of shareholders of the amalgamating company.”

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