New Delhi, June 30 (IANS) The Film Exhibition Industry of the country needs tax incentives in the form of a tax holiday period, lower tax rates and subsidies among others to achieve its potential and for its higher penetration into the Tier-II and Tier-III cities, according to the Federation of Indian Chambers of Commerce and Industry (FICCI).
In its budget recommendation, the movie theatre industry body has said that although India is the world's largest producer of movies, its film exhibition industry is largely untapped.
"While there has been de-growth in screen-counts in India over the past few years, China has recorded phenomenal growth which can partly be attributed to a lower tax rate.
"Tax incentives in the form of tax holiday period, lower rates, weighted deductions, subsidies etc for the film exhibition industry (for instance similar to the one in Section 80HHF of the Income Tax Act 1961 which has been discontinued) be provided, in order to increase penetration of the exhibition industry in Tier 2 and 3 cities," FICCI's recommendation said.
It has further sought clarity over the the definition of "royalty" pertaining to sale, distribution or exhibition of cinematographic films.
Definition of royalty under the Income Tax Act 1961 excludes consideration for the sale, distribution or exhibition of cinematographic films, it said, adding that the law was made when non-theatrical rights were not in existence but now with the advent of digital age, there are various non-theatrical ways to exploit film rights as well.
"There is ambiguity as to whether grant of non-theatrical rights also form part of the exclusion and clarity around this would be much appreciated. Clarity in the definition of royalty pertaining to sale, distribution or exhibition of cinematographic films be provided," it said.
The industry body observed that Rule 9A and Rule 9B of the Income Tax Rules permit deduction of expenditure incurred on production of films and acquisition of film distribution rights respectively based on when the copyrights or distribution rights in films are exploited or depending on the date of release of the film and the provision is an old one which requires changes in light of the recent trends for instance films which are showcased on the digital platform.
"There are several ambiguities surrounding the applicability of the aforesaid rules (applicable to satellite, music), scope of its applicability on expenses (only revenue or both capital and revenue), etc to name a few. It could be clarified that these rules could be extended to movies produced on digital platform and also remove ambiguity regarding its applicability to satellite, music etc," FICCI added.
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz