Service tax on film industry might be rolled back
Pallabika Ganguly 18 March 2010

The I&B minister has said that she will try to roll back the service tax proposed in the Budget on the film industry, which amounts to double taxation

The service tax levied on the film industry, which was announced in the recent Budget, might be rolled back. The Union minister for information and broadcasting Ambika Soni has said that she would support the industry’s demand to get relief on service tax.

“I do not want the film industry to be unhappy about the double tax which was announced in the recent Budget. You cannot charge service and value added tax (VAT) on the same item. You already charge service tax on the input cost; you should not charge it on the output,” said Ms Soni, while speaking at the ‘FICCI-Frames 2010’ seminar in Mumbai.

She added, “Earlier, the tourism segment faced the same problem as they were already charged on their inputs (faxes, telephones, taxi services). The industry was also asked to pay tax on their turnover. We fought against it and the government granted 90% relief. I hope in this matter (the film industry) will get 100% relief.”

The government has also seen great potential in animation and visual effects, so it is taking steps to support this segment.

“We are planning to set up a national centre for animation, gaming and visual effects and an allocation of Rs52 crore will be made for the same. Most of the good animated films like ‘Avatar’, and ‘Krish’ faced piracy issues but now we are trying to curb the issue as much as possible. The Planning Commission is also allocating Rs660 crore to the National Heritage Mission for the 100th anniversary of the film industry,” said the minister.
 

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