NEW DELHI: Finance Minister Pranab Mukherjee today agreed to consider favourably the demands relating to the entertainment industry.

However, he said the budget exercise was on and he was not free to divulge any of the steps he would be taking.

The Minister was responding to the demands made by representatives of the entertainment industry accompanied by Information and Broadcasting Minister Ambika Soni who met him today with various demands relating to taxation and other matters.

The delegation included Film Federation of India President T P Aggarwal, All India Film and Television Producers Guild President Ramesh Sippy, Yash Chopra who is President of the FICCI Entertainment Committee, FICCI Secretary General Amit Mitra, FFI Vice-President L Suresh from the south, several television representatives including Puneet Goenka and Anurradha Prasad, and representatives of the animation industry. Senior officials of the I and B and Finance Ministry were also present.

The film industry, which had heaved a sigh of relief when the counterveiling duty for unexposed colour films was abolished in 2002, is once again battling for its abolition since it was re-introduced in 2004 at the rate of 16 per cent 

Although the raw stock is imported, the CVD was imposed over two decades earlier since the Hindustan Photo Films sliced the jumbo rolls into smaller rolls 

Aggarwal told radioandmusic.com that the industry raised this issue and referred to the unfair treatment of the film industry in this regard 

The industry is also seeking parity in taxation amongst all media, as it feels the government is encouraging new technologies by offering them tax concessions while ignoring the film industry which was the biggest foreign exchange earner and one of the largest employers in the country. The industry has sought exemption from service tax to the film industry 

The industry was also seeking relief in Fringe Benefit Tax for the film industry which had to pay huge FBT in the matter of booking of hotels, travel, food etc. even when traveling for professional work 

The government has also been requested to consider relief on remittances abroad under Section 195B of the Income Tax Act as these are for professional work or for hiring foreign technicians 

The industry wants that advance tax and the interest levied under Section 234B and 234C should be made discretionary and not mandatory for the film industry as it often became difficult – particularly the months of December and January – since the profits from any film were subject to a high degree of uncertainty 

Tax deducted at Source for licensing of copyright varies between 10.3 to 11.33 per cent, which the film industry feels is very high particularly for regional cinema and the delegation asked the Minister to consider regrouping TDS levied 

There is a proposal for removal of anomaly on duty levied on imported films and tapes, and review the Goods and Service Tax (GST) 

Soni had earlier supported the demand by the FICCI for a 10-year tax holiday for the gaming, animation and the VFX (visual effects) industry, as they were emerging sectors.

In the last budget for 2010-11, Mukherjee had announced a rationalization in the customs duty structure for import of raw stock by charging customs duty only on the carrier medium to remove the differential rates between importing digital masters of films and cinematograph film. The same would apply to music and gaming software imported for duplication. However, he had said â€?in all such cases the value representing the transfer of intellectual rights would be subjected to service tax.' 

He had also announced project import status at a concessional customs duty of 5 per cent with full exemption from special additional duty to the initial setting up of digital head end equipment as cable transmission of infotainment was undergoing a transformation with the adoption of digital technology and the multi-service operators need to invest in digital equipment.