Just like the print media, which has been clamouring for a zero rating for newspapers under the new GST regime, the electronic medium and radio, bleeding after ad cancellations of over Rs 2,000 crore, requested the government to treat them at par with print
BestMediaInfo Bureau | Mumbai | January 23, 2017
The Indian Broadcasting Foundation (IBF) has urged the government that television as a medium should be treated at par with print. This will mean that the Goods and Services Tax (GST) rate of five per cent should be applicable to TV to make it affordable to the masses. IBF is the apex body of the broadcasters in the country with more than 400 channels and 90 per cent of the viewership.
Punit Goenka, President, IBF said, in a statement, “It is important that government recognises TV services which has evolved over the years as a product to be classified and categorised under the item of mass consumption, having a GST rate of five per cent so that it becomes affordable to the masses.”
Just like the print media, which has been clamouring for a zero rating for newspapers under the new GST regime in the wake of mass retrenchment and closing down of various editions, the electronic medium and radio, bleeding after cancellations of advertisements over Rs 2,000 crore, requested the government to treat them at par with print as they not only provide news and entertainment but also help educate the masses.
Explaining the strength of television, Goenka added, “Not only does it provide infotainment, entertainment and influence public opinion but unlike the other mediums is also not constricted by level of literacy and is education agnostic. Going by the number of TV households that stand at 120 million currently, we submit to the government that broadcast services, i.e. TV and radio, must be treated at par with print in the new GST regime. This submission is based entirely on the fact that TV services have become integral part of everyday life to the vast majority in the country and the general economic downturn has impacted the sector extensively.”
To say business in all categories have been impacted by the Prime Minister's demonetisation scheme would still be an understatement. ‘Heroic, revolutionary, failed and poorly implemented’ are different terms to attribute the success or failure of the November 8 announcement depending on which side of the political spectrum one is. But there is no denying the fact that businesses across various sectors have taken a substantial hit.
As per information updated by the Ministry of Information & Broadcasting on December 31, 2016, there are 899 channels in the country out of which 399 are news and current affairs channels and 500 are non-news. Some news channels shutting down precipitously or handing over pink slips on a mass scale is not something unheard of. But little does it find mention in the newspapers or the air time of the channels. Combine this with overcrowding of channels for the same advertising pie, which itself has been squeezed following demonetisation and the rising infrastructure and 'content cost', and it seems that many licenses would either get cancelled or would be submitted voluntarily by stakeholders.
“Compounding the woes are DAVP advertisements that all broadcasters have to mandatorily carry on their networks, the rates for which has not been revised since 2010. The rock-bottom rates are not at all in keeping with the existing market rates and allows little flexibility or manoeuvrability to carry out businesses and is heavily subsidised by the broadcasters,” said Rohit Gupta, President, Network Sales and International Business, Sony Pictures Networks.
Speaking from the perspective of smaller channels, which may invariably close down or cut down content cost, both of which would have a cascading effect on viewer's choices, A Mohan, President (Legal & Regulatory), ZEEL, said, “We urge the government to free the media, print, television and radio from the obsolete taxation squeezes and attacks on revenue streams, as the vitality of this industry is essential to protect the fibre of the country, both socially and economically.”
Girish Srivastava, Secretary General of IBF, said, “The electronic medium and radio just like the print medium helps in shaping public discourse and any fragmentation due to incidence of indirect taxes going up would lead to weakening of public conversation in particular and democracy in general by putting thousands if not lakhs at risk of losing jobs. The GST seeks to maintain or reduce the tax burden. It is high time the government treats the fourth pillar of democracy at par as the sector is unprepared to take a tax hike under the new GST regime.”
It is also in the Government's best interest to have an exuberant and effusive media which needs to come under the domain of reasonable fiscal and labour policies. The current regulatory and tax regime should not be stifling. A step in that direction needs to be reflected in Budget 2017.