Films exempted from India’s service tax, no customs duty for TV panels

Rebecca Hawkes | 18-03-2012

The service tax placed on cinema admissions and film copyright will be removed in this year's union budget, in celebration of the centenary of Indian cinema.

The government has placed "admission to entertainment or access to amusement services" in the new Negative List, which exempts them from service tax. TV or radio advertisements, however, are to be excluded from the list.

"The Year 2012 marks the beginning of the centenary year of Indian cinema. Despite the change in titles from Dada Saheb Phalke's Raja Harishchandra to Ra.One in recent times, the industry has played a pivotal role in unifying our country in the wake of her considerable diversity," India's Finance Minister Pranab Mukherjee told Parliament on Friday (16 March).

"To add to their spirit of celebration, I propose to exempt the industry from service tax on copyrights relating to recording of cinematographic films," he said.

The film industry, which conducted a one-day strike in February to protest against the anticipated imposition of a 10.3% service tax, welcomed the decision.

"Ours is a struggling industry. This will give us some desperately needed relief," Vinod K Lamba, president, Film Federation of India, told The Hindu - also crediting Information and Broadcasting Minister Ambika Soni for championing the cause of filmmakers.

In his budget speech for 2012-13, Pranab Mukherjee also announced full exemption from India's basic customs duty for LCD and LED TV panels.