Tax films versus welfare funds, govt walks the tight line

While the government is keen to address the concerns of film industry stakeholders on the imposition of service tax, there is also a huge requirement of funds for the slew of welfare programmes and measures that the UPA government has undertaken.

While the government is keen to address the concerns of film industry stakeholders on the imposition of service tax, there is also a huge requirement of funds for the slew of welfare programmes and measures that the UPA government has undertaken.

“The Indian film industry is very concerned, worried and apprehensive over the fact that 10.3% tax is being imposed as service tax. I will take a team of industry representatives to meet the finance minister but we must understand his compulsions too,” said Ambika Soni, Union information and broadcasting minister.

“The finance minister has been speaking in recent times about the load of welfare measures the UPA government has undertaken like MNREGA, right to food, right to education etc. The situation is very tight. Government needs funds for these welfare measures.”

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The film industry has already announced a countrywide strike on February 23 to protests the tax imposition.

Soni was speaking on the sidelines of an MoU-signing event between the I&B ministry and the tourism ministry that will position Indian cinema as a sub brand and a separate vertical of the Incredible India brand at various international film festivals and markets abroad.

The MoU will result in promoting and facilitating India as a filming destination for both international and domestic film producers. In 2009-10, 23 permissions were granted for shooting in India, in 2010-11, 21 permissions were granted and in 2011-12, 20 permissions were granted.

Another key aim of the MoU is to initiate dialogue with the states for development of locations for film shootings and promotion of tourism.

The inter-ministerial MoU is also expected to help increase India’s share in world tourist arrivals in the country from 0.6% to 1.0% by the end of XII Five Year Plan. This would result in achieving 11.37 million foreign tourist arrivals by 2016, as compared to 6.29 million foreign tourist arrivals in 2011.