The film industry, sore over the Budget proposal to impose service tax on the copyright of cinematograph films and sound recordings, is trying to persuade the finance ministry to do away with the tax as it will increase the burden on the Rs 9,600-crore industry.
Recently, a six-member team led by the producer and director Yash Chopra visited the North Block seeking help from the government and requesting concession on the newly introduced service tax on the films and recordings.
The team met the revenue secretary Sunil Mitra and discussed the issue with him.
Last week?s meeting is not the first one since imposition of the tax in Budget 2010-11. Chopra and others from the film fraternity such as Boney Kapoor, Ronnie Screwvala and Mahesh Bhatt have held a series of meetings with senior officials from the Central Board of Excise and Customs (CBEC) in the past. In Budget 2010-11, the government announced imposition of service tax on commercial use or exploitation of films and sound recordings along with events like the Indian Premier League and T20 cricket tournaments.
The film industry, taken aback by the move, pointed out that the film and entertainment industry, already battling spiraling costs, needs to be spared from these proposals.
Earlier, on one occasion Yash Chopra had said, ?The film and music industry is already burdened by VAT and now additional levy of service tax can harm the industry, that is in a critical mode after 2009.?
Any increase in the service tax or a state-level entertainment tax leads to higher prices of movie tickets. The service tax is charged at10.3%, including cess. Apart from this, the film industry also requested that entertainment tax ? levied by state governments ? should be subsumed in the goods and services tax (GST). However, the decision on this is to be taken by states as they stand to lose revenue in the process. Currently, entertainment tax is scheduled to be out of the GST ambit which leaves it to states to levy entertainment tax and raise the tax rates as ans when they feel.