|
According
to the CII, the distributor is not rendering a service and the imposition
of this tax, particularly from retrospective effect, can further
hurt the health of this risky business.
Currently,
the revenue department has been treating distribution of films as
a service and claiming a tax of 10 per cent (and additional education
cess).
CII
has also asked for continuation of income tax concessions to multiplexes
in non metro areas till 2008. It also wants the same concessions
to be provided to multiplexes in metro areas. Currently, multiplexes
in non metro areas only enjoy income tax deduction (u/s 80IB 7A).
And this is expiring on 31 March 2005.
All
multiplexes set up by 31 March 2008 should be eligible for the income
tax exemption, the CII has suggested in its Budget recommendations.
Also, the operator (rather than owner and operator) of the multiplex
should be entitled to the exemption. Currently, income tax deduction
is restricted to only owner operators.
CII
has called for rationalisation of the import duty structure on all
sound and projection equipment to maximum 15 per cent (all inclusive,
basic + CVD). The duty structure remains high, at about 35 per cent
(basic + CVD). Since most of the equipment is not made in India,
the price is extremely high. As multiplexes use multiple sound and
projection equipment, the cost becomes prohibitively high and projects
become unviable with longer payback periods.
The
government should consider giving incentives on custom duty levied
on import of equipment for educational purpose (film and television).
Even a complete waiver should be considered to the private sector
to enter this field so that institutes of world class are set up
in India. Education institutes have a very low or negative return
on investments and can hardly afford to bear the high customs duty
on equipment which are mostly as high as 35 per cent, the CII said
in its Budget recommendations.
|
