The Indian film industry is happy that the finance minister has addressed some of their needs but feels that the announcement to exempt cinematographic jumbo rolls of 400 feet and 1,000 feet from countervailing duty (CVD) by providing full exemption from excise duty as only cosmetic.
The industry said the minister has left out certain important issues such as dual taxation and copyright issues but admits it could be a beginning of more good things to come.
“The exemption is in a positive direction as the industry was beginning to get a feeling the government is anti-industry. While it’s not much the finance minister has chosen to respond and acknowledge the industry’s efforts,” said Mahesh Bhatt, filmmaker and director.
“This was a longstanding demand from the industry and it has been looked at. But its no big deal as the exemption on the unexposed rolls will bring about a marginal difference in costs,” said Kamal Jain CFO, Eros International.
On an average, a three-hour film takes up at least 500 cans at R11,000 per can thus taking the entire budget of unexposed films to Rs 55 lakh.
The basic customs duty rate on such rolls has been retained at 5%.
“While the FM has provided a stimulus by providing exemption from CVD on the unexposed jumbo rolls of cinematographic films the existing basic custom duty regime on exposed jumbo cinematic graphic films continues,” said Jaideep Kulkarni, tax partner, Ernst & Young.
“The industry was not expecting much from the budget and so it was delivered. Going forward dual taxation is something that will be addressed at a bigger policy driven decision,” said Smita Jha, media consulting practic leader, PriceWater HouseCoopers. At present the industry pays both service tax and the value added tax. The implementation of GST should change things.