By Our Staff
Himanshu Parekh, Partner and Head, Corporate and International Tax, KPMG in India, foresees high expectations for M&E sector with good budget promised by finance minister this year.
Here goes:
“The tepid economic environment owing to a slowdown in domestic consumption and COVID-19 crisis has had an adverse impact on the Media and Entertainment (M&E) sector in India. 2020 has been a year “off script” for the M&E sector. There are high expectations, especially given that the Finance Minister has promised a never before like Budget this year.
One of the major expectations of the M&E sector revolves around Equalisation Levy (EL). The way the EL provisions are drafted, there are several interpretational issues and ambiguities surrounding them. It would do well for the Government to demystify these issues in the Budget. Another ask of the industry is to reduce the rate of TDS on domestic payment towards non-theatrical rights to 2% on par with the TDS rate in respect of sale, distribution and exhibition of cinematographic films. Further, the tax law should be suitably amended to allow TDS credit reflected in Form 26AS, irrespective of the year in which the corresponding income is offered to tax. In case of amalgamation of companies, provisions should be amended to allow benefit of carry forward of losses to the companies involved in M&E sector as well. On GST front, allowing input tax credit on certain expenses relating to production of content and on payment of advance for acquisition of rights, would go a long way to improve the working capital position, especially during the ongoing pandemic. Suitable amendments to address the aforesaid issues would act as a much needed vaccine for the M&E sector.”