Budget
FICCI pushes for 10-year tax holiday for AVGC industry
NEW DELHI: With the nation waiting for the maiden Narendra Modi government’s Budget 2015, every sector is speaking its heart out with regards to their expectation from the Union Budget.
The entertainment wing of the Federation of Indian Chambers of Commerce and Industry (FICCI) in its wish-list submitted to the Finance Minister Arun Jaitley- who also holds the Information and Broadcasting portfolio, addressed the issues faced by not just broadcast, cable and radio sectors, but also pointed out the changes needed in the cinema and animation sectors.
Cinema
Referring to the film sector, FICCI wants Digital Cinema Services to be included under the Negative List for Service Tax exemption, as this will help the industry, which is struggling against piracy. Digital Cinema service distributors were exempted from Service Tax vide notification of March but with the introduction of the Negative List in Service Tax, this circular got rescinded.
It wants the Government to exempt performing artists from levy of Service Tax, which will help the industry that already suffers from very high rate of indirect taxes in India. Levy of service tax on artists increases the cost of the film producers and distributors, which ultimately gets passed on to the consumer.
On-screen advertising in cinemas and multiplexes may be exempted from levy of service tax as the on-screen advertising within cinemas caters to advertisers with small businesses, with limited resources. The on-screen advertising forms an important source of revenue for the exhibitors, which are already reeling under the pressure of multiple taxes. Until recently, on-screen advertising within cinemas and multiplexes was subject to service tax till 30 June 2012. Since 1 October 2014, the negative list of services has been amended whereby on-screen advertising within cinemas shall be liable to service tax.
There should be a clarificatory instruction on the on applicability of service tax on revenue sharing arrangements for exhibition of films. At present, service tax is levied on revenue of such sharing arrangements for exhibition of films between producers, distributors, sub-distributors, and exhibitors. But the exhibitions of films are carried out on a principal to principal basis and neither party renders any service to another.
Furthermore, Rule 4(a) of the Service Rules 2012 should be amended suitably to include post-production services, as this will provide parity with goods imported for re-export and will promote growth of such services. At present, services performed on the goods temporarily imported for re-export are not liable to Service Tax due to specific provision in POPS Rule. But in case of post-production services such as dubbing, editing, title printing etc. the above rule is not applicable and Service Tax is payable.
FICCI wants reversal of the increased withholding tax to eliminate the differentiation for the transactions with entities in nations having treaties and other entities. This withholding tax rate has a significant impact on payments to be made for acquisition of content. There is a direct impact on companies distributing foreign films in India and Indian films distributed outside India with non-residents with no treaty jurisdictions such as Croatia, Fiji, and Monaco etc. While the withholding rate for transactions with major treaty nations such as UK and US is in the range of 10 per cent to 15 per cent, the rate of 25 per cent is punitive for the same transactions which do not originate from treaty nations. (It pointed out that the Tax on royalty and fees for technical services earned by non-resident taxpayers has been increased from 10 per cent to 25 per cent in the cases where India does not have a Double Tax Avoidance Agreement (‘Treaty’) with the country of service provider.
FICCI also wants a suitable reduction in the existing period of 90 days before end of the financial year (under Rule 9A and 9B of IT Rules) as this will grant relief to assesses whose feature films have incurred losses and have been released for exhibition in the last quarter of the financial year. It said that in certain cases where not all rights of exhibition of a feature film are sold and it is released for exhibition on a commercial basis within 90 days before end of the financial year, the feature film performs poorly and it is exhibited only for a short duration.
Consequently, the film producer may not recover costs. In such cases in view of the prevailing IT Rules, the film producers are unable to claim a deduction of entire production cost and the loss is to be carried forward to the next financial year. Accordingly, such film producers are unable to claim losses in the year the feature film is released for exhibition despite no further scope of income. A similar situation exists in the case of expenditure of distribution rights in view of Rule 9B of IT Rules.
Animation and Special Effects
Referring to animation, special effects (VFX), gaming and comics (AVGC), FICCI wanted a 10-year Tax Holiday for the AVGC industry and lifting of service tax on studios developing original content. It wanted restoration of STPI advantage scheme for AVGC or ITES for another 10 to 20 years and cover/encourage exports as well as IP creation.
It wants animation as one of the priority sectors and said the Minimum Alternate Tax (MAT) applicability for units undertaking Animation work in SEZ should be withdrawn to encourage export of animated contents.
Encouragement should be given to entities through reduced tax rates/incentives for exploitation of self-developed content in overseas markets. Exemptions should be granted to overseas payments to foreign artists stationed overseas from withholding taxes. A 50 per cent reimbursable MDA (Market Development Assistance) should be given for travel and registration fees to international market events and withholding tax on revenues accruing from sales of mobile games in non-India markets as well as removal of withholding tax on the development contracts given to mobile game developers outside India should be removed. Also, there should be removal of withholding tax paid by expats working in India for Indian mobile game development companies. This was because of long gestation period, potential to generate IPs, and potential to generate future stream of incomes.
The Government should consider setting up of co-production fund for a minimum of five years with Rs 110 crore each year with the Children’s Film Society, India, for AVGC. This will help the industry immensely and in the next five years India can boast of over 100 successfully implemented co-productions and shows, which will be extremely strong original intellectual property out of India, one of the strongest libraries establishing and restoring forms of art, culture and creative styles and designs which will be known throughout the globe. India would emerge a true leader in the digital content economy and it will ensure jobs for over 400,000 to 500,000 creative, techno creative and artistic youth of the country in the next five to seven years.
The industry body says the excise duty on local manufacture should be brought down from 12.5 per cent to zero per cent (similar to film and music industry). This will enable CVD to be brought to zero. In addition, the Import duty on consoles (Gaming hardware) should be brought down to zero per cent. This will increase the installed base of gaming consoles to enable the local developer ecosystem to flourish.
MUMBAI: Anuj Singhal, managing editor at CNBC- AWAAZ and CNBC BAJAR, operates at the sharp end of India’s business news ecosystem. With over two decades in business journalism, he has earned credibility for decoding policy, markets and macro trends for millions of Hindi-speaking investors. Equal parts newsroom leader and market analyst, he shapes editorial direction while anchoring flagship shows that break down the economy, politics and corporate India in real time.
Known for cutting through jargon and hype, Singhal blends data, discipline and clarity — a mix that has made him one of the most trusted voices in Hindi business news.
In this interaction, he discusses the Union Budget, trade deals, newsroom strategy and what truly moves markets and ratings.
• What was the single most market-moving announcement in this Budget, and why?
The most market-moving element was the clear commitment to fiscal consolidation without compromising capex. The glide path on fiscal deficit reassured bond markets and foreign investors, while sustained public investment kept growth expectations intact. That balance removed a big overhang for both equities and debt.
• Do you see this Budget as growth-oriented, fiscally cautious, or politically calibrated?
This Budget is growth-led but fiscally disciplined. It avoids overt populism, stays within macro guardrails, and prioritises medium-term competitiveness over short-term optics. Politically, it is restrained; economically, it is deliberate. The message is clear: stability over spectacle.
• How is CNBC-AWAAZ programming different, especially in decoding trade deal impact?
CNBC-AWAAZ goes beyond headline reaction. We translate policy into portfolio impact — sector by sector, stock by stock.
On trade agreements, our focus is on:
-Earnings visibility
-Export competitiveness
-Currency implications
-Margin sustainability
We don’t treat trade deals as political milestones. We decode them as profit-and-loss events for corporate India and map them to FY earnings trajectories.
• Which sectors look like clear winners and laggards over the next 12–18 months?
The next 12–18 months favour sectors aligned with structural spending and supply-side strengthening.
– Clear beneficiaries:
Capital goods and infrastructure
Manufacturing linked to export chains and PLI ecosystems
Power, defence, and logistics
– Relative laggards:
Consumption segments dependent on immediate demand revival
Businesses facing margin pressure from global volatility or pricing power erosion
This is not a momentum-driven market environment. It is execution-driven. Balance-sheet strength and order visibility will matter more than narrative.
• One headline to sum up this Budget 2026 for India Inc?
“Steady Hands, Long-Term Vision: A Budget That Rewards Discipline Over Drama”.
• What editorial filters do you apply before calling something ‘market-positive’ or ‘negative’?
We apply three structured filters:
– First: Earnings translation — does this materially change earnings visibility or cash flow outlook?
– Second: Time horizon — is the impact immediate, cyclical, or structural?
– Third: Valuation context — good news priced in or not.
If a policy doesn’t move earnings or risk perception, we don’t oversell it.
• How has business news consumption changed around big policy events?**
There has been a clear behavioural shift. They’re less interested in what was said, more in what it means for their money. There’s also a clear shift toward second-screen consumption, with digital platforms complementing live TV. The audience seeks sharper accountability. Viewers no longer accept broad optimism or pessimism — they want frameworks, numbers, and sector mapping.
• CNBC-AWAAZ decisively outperformed on Budget Day. What editorial and distribution choices mattered most?
Three deliberate strategic choices:
– Preparation depth:
We build scenarios months in advance — deficit ranges, sectoral incentives, tax calibrations — so we’re ready with analysis the moment numbers are announced.
– Language of impact:
We translate macro policy into investor-friendly Hindi without diluting complexity. That bridges accessibility and sophistication.
– Integrated distribution:
Television, YouTube, and digital platforms operate as one editorial grid, not parallel silos. This ensures continuity of narrative.We stayed analytical while others stayed reactive.
• How different is your YouTube audience from your TV audience?
The behavioural differences are subtle but important. TV audiences prioritise authority, structured debate, and context. YouTube audiences want speed, clarity, and actionable insights — often sharper, sometimes more opinionated. However, both share one expectation: accuracy. The format evolves; the trust benchmark does not.
• How do you retain viewers after the budget speech ends?
By shifting from announcements to implications.Retention comes from shifting the narrative from announcement to implication. We break down sectoral breakouts, stock-level impact, and what to do next. The speech is just the trigger; analysis is the destination.
• Is Budget Day your biggest traffic day?
It is one of the biggest — but more importantly, it is among the deepest in engagement. Viewers spend longer durations, revisit segments, and seek follow-up programming. That indicates behavioural trust, not just traffic.
• What’s the first thing you personally track on Budget Day — the speech or the markets?
The markets. They’re the fastest truth-teller. The speech explains intent; markets reveal interpretation.
• Your personal Budget-day ritual?
Early morning prep, minimal distractions, and once the speech begins, complete immersion. For me, Budget Day is less about reaction and more about reading between the lines.
• What drove your Budget-day ratings dominance, and how are Budget and trade deals shaping markets now?
Our dominance came from credibility, consistency, and clarity.
As for markets, both the Budget and recent trade deals are reinforcing a narrative of policy stability and global integration, which supports valuations even amid global volatility.
For Singhal, the market is the final judge. Policies can promise and speeches can persuade, but prices reveal what investors truly believe. As India’s investor class grows more informed and more demanding, business journalism is shifting from commentary to calibration. The premium is on clarity, context and credibility. In a landscape flooded with noise, the real edge lies in interpretation. In the end, the markets listen to numbers, not narratives , and Singhal’s craft is helping viewers tell the difference.
