Comments (0)
News |  22 Jul 2024 12:24 |  By RnMTeam

Kaushik Das, Entrepreneur and CEO of AAO NXT, on the Union Budget Expectations for the Media & Entertainment Industry:

"The Indian media and entertainment (M&E) industry is flourishing, bolstered by the surge in OTT platform usage, governmental support for digital infrastructure, and the ever-growing enthusiasm for cinema. Despite numerous tax reforms introduced over the years, several critical issues remain that need to be addressed in the upcoming Union Budget.

One major challenge involves the TDS (Tax Deducted at Source) system. Currently, taxpayers face significant difficulties in reconciling TDS with their income due to timing differences. To alleviate this burden, it would be beneficial if the Income-tax Act allowed for TDS credit as reflected in Form 26AS for the corresponding year.

Advertising agencies also face hurdles with the existing TDS framework, which impacts their cash flow due to TDS being applied to the gross billing amount. Lowering the TDS rate on payments from advertisers to these agencies would help ease this financial strain.

Additionally, payments to foreign satellites and data centers are presently classified as royalty or fees for technical services, making them subject to withholding tax. Clarifying that these payments are not taxable in this manner would greatly assist M&E companies utilizing these services.

Moreover, the rules for carrying forward losses during company amalgamations should be expanded to include M&E sector companies, fostering growth and consolidation within the industry.

On the GST front, implementing the proposed changes from the recent GST Council meeting, such as the amnesty scheme for waiving interest and penalties and reducing pre-deposits for filing appeals, would significantly reduce ongoing litigations and create a more supportive business environment.

A pressing concern for the industry is the taxation of online games. The sector advocates for a 28% GST on Gross Gaming Revenue rather than the total amount deposited by players, aligning the tax structure with industry needs.

OTT platforms, in particular, have become a cornerstone of the M&E industry, revolutionizing how content is consumed and distributed. The government’s continued support for digital infrastructure is crucial in sustaining this growth. However, the sector faces specific challenges, such as the need for clearer regulations around content and taxation policies that reflect the unique nature of OTT services. Streamlining these regulations would not only enhance compliance but also encourage further investment in the sector.

The government's ambition for a 'Developed India' by 2047 is commendable. Favorable policy and tax measures for the M&E sector, especially focusing on the rapidly evolving OTT space, in the upcoming budget will be crucial in driving the industry's growth and achieving this vision. At AAO NXT, we are committed to fostering innovation, promoting regional storytelling, and contributing to the vibrant digital entertainment landscape in India and beyond."

Games