Home >Industry >Media >Union Budget: Filmmakers, theatre owners seek tax relief, more incentives for single screens

NEW DELHI : The Union budget will be crucial for the Indian film and entertainment sector, which is staring at a 67% contraction in FY21 owing to the covid-19-led disruptions. Theatre owners are expecting some respite, including easier terms for running their businesses, such as a waiver or reduction in power and maintenance charges, single-window licence for opening more screens, and cheaper financing options for opening multi-utility facilities such as on-premise food courts.

The measures will be key to help recoup lost ground and build on the gradual rise in footfall, with entertainment-starved audiences looking at movies as a stress buster amid the covid-19 crisis. Industry executives said higher attendance will fetch more revenue for theatre owners and taxes for the exchequer.

In 2020, 1,500 -2,000 cinema halls, especially single screens, in India had to shut shop during the lockdown as business came to a standstill. “It has been an unprecedented 12 months and while we are by no means out of the woods yet, at least the light at the end of the tunnel is now visible with covid vaccinations being rolled out across our country. Against this backdrop, the Union budget assumes even greater significance than usual," Siddharth Roy Kapur, founder and managing director of Roy Kapur Films and president of Producers Guild of India, said in an emailed response.

The industry is urging the government to consider its long-standing demand for subsidies and incentives to encourage screen penetration in India in an increasingly declining theatrical market. “The focus should be on generating more jobs and keeping the business alive, which will bring in more tax in the long run," said independent distributor and exhibitor Akshaye Rathi.

“While power and electricity charges are up to the states and city electricity boards, we hope for these to come to us at industrial and not commercial rates," he added. Theatres typically end up paying 20 lakh per month as electricity charges.

Kailash Gupta, chief financial officer, INOX Leisure Ltd, said speedier tax refund, interest-free loans and reimbursement of wages for contractual workers besides subsidies on salaries paid to the employees during the lockdown should also be considered as relief measures by both the central and state governments. “A waiver of licence fees and taxes such as local body entertainment tax, property tax and show taxes for two years will provide much-needed relief and will be a revival impetus for the industry," he added.

Caps on ticket prices should also be done away with, giving cinemas the right to run their business their own way. For years, states like Tamil Nadu and Andhra Pradesh have worked with a ceiling on ticket prices, between Rs. 150-160, restricting the kind of differentiated technologies or consumer experiences multiplexes can bring to cinemas there.

Infusion of liquidity in the content production sector through a variety of means such as a liberal loan regime, relief on tax and duties, and refinancing schemes for stalled or delayed projects should be considered, Roy Kapur added. The government should also look at reduction on import duties for capital goods used for production or transmission of content, such as technical equipment, media experts say.

“We hope the government can look at creating culture hubs in specific cities by providing tenders and deals to companies that are interested in nurturing art and cinema," said Mahendra Soni, co-founder and director at Bengali production house SVF Entertainment.

Marathi film producer Akshay Bardapurkar pointed to the Uttar Pradesh model where the state government is providing several perks including cash benefits to films shot in the state and has proposed a Film City project in Noida.

“The government should proactively also look at incentivizing international films or content creators to shoot in India, in an attempt to assist employment and increase revenues generated from assets like studios, especially for animation content," Harikrishnan Pillai, CEO and co-founder of digital agency TheSmallBigIdea.

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