Mumbai, Feb. 27 -- The Indian film industry may churn out more movies annually than its foreign counterparts, but its revenues don't come close to matching the figures that Hollywood rakes in.
According to insiders, when it comes to tax reforms, the Indian film industry - that turned 100 in 2013 - has largely remained neglected. In fact, it only received industry status 15 years ago, which means that only then did it become possible for makers to insure films - a practice common in the west - and also get loans from financial institutions.
Now, with the Union Budget set to be presented on February 28, those concerned with the industry are once again hoping for tax reforms to turn in their favour.
Call off duty
Reading off the top of his wish list, Vijay Singh, CEO, Fox Star Studios, says, "Entertainment tax should be subsumed into GST (Goods and Services Tax), and incentives should be given to promote the setting up of more multiplexes, since our screen density is low."
Taxes are also a concern for film-maker Anurag Kashyap. He feels it is most important to "get clarity on how we are being taxed". He adds, "We pay entertainment tax, VAT (Value-Added Tax), service tax, and some more taxes over and above these. Despite so many taxes, they don't provide security for our movies. They also censor our films and use us as soft targets. The benefit of the industry has been the last priority for the government," he says.
Big screens, small benefits
At 45 per cent, Maharashtra's entertainment tax is the highest in the country, and decreasing it has been a long-standing plea of theatre owners. "If it is decreased, tickets will become cheaper, and more people will come in to watch films," says Manoj Desai, who owns G7 Multiplex, Bandra (W), and Maratha Mandir theatre, Mumbai Central.
Another grouse that the entertainment industry has is regarding digital equipment, such as projectors, which are taxed at 320 per cent. Desai adds, "If these taxes are reduced, we can get better technology to give viewers a better moviewatching experience. Currently, we're considered an industry just for the sake of it, since we don't get the benefits of being an industry. We have no exemption from service tax or professional tax."
Meanwhile, the CEO of PVR Pictures, Kamal Gianchandani, tells us that setting up a cinema hall in India is no mean feat. While an easier process of obtaining permissions for the same would be beneficial, another good move would be to exempt cinemas and multiplexes from service tax levied on on-screen advertising. "We have modern digital projection facilities at our cinemas, which enable us to screen live events. Unfortunately, due to censorship regulations, exhibitors are unable to screen live performances, sport events, etc. We request the government to make provisions permitting the same."
Calling this phase a difficult time for the film industry, Anirban Das Blah, CEO of the talent management company, CAA KWAN, says, "We need the government to introduce measures that increase the financial viability and returns on capital invested. An example would be reducing the service tax burden or creating incentives to bring in foreign institutional investors for film finance."
Producer-director writer Mahesh Bhatt adds, "Entertainment taxes are killing us. There should be incentives given to us to attract film-makers from abroad to partner with us. We can have collaborations here. We can create an environment that is economically friendly for entertainment industries across the world to come here for film shoots. India has the largest skilled workforce, and some simple measures taken in the right direction can put us on the world map."