Moviedom celebrates budget windfall

*** CVD abolished on raw stock
*** IT benefits on all software exports
*** Import duty on studio equipment slashed

The collective mood in the film industry appears upbeat thanks to the budget proposals announced by finance minister Yashwant Sinha on February 29 for 2000-2001. With good reasons, too, for almost all its long-standing demands have been met.

Hum Saath Saath Hain, indeed! While announcing last year’s budget proposals in parliament, finance minister Yashwant Sinha had asked the entertainment industry a rhetorical question, “Hum Aapke Hain Kaun?” And, the reliefs granted to filmdom then, he said, had come from the heart, Dil Se. This year, during his budget speech, he was even more definitive. He told the entertainment industry, “Hum Saath Saath Hain!”

PV Gangadharan, president of the Film Federation of India, said, We’re happy that the long-unheeded demands of the film industry have been conceded, such as the abolition of Countervailing Duty (CVD) on colour positive and negative cinematographic film. Among other reliefs granted to filmdom are a reduction in the basic customs duty on colour positive films in jumbo rolls and colour negative rolls, cinematographic cameras and other related equipment.

The FFI chief also hailed the extension of Income Tax benefits to all film software exporters, under section 80HHF of the Income Tax Act 1961. This, he hoped, would boost the export market, and bring in some valuable foreign exchange to the country.

Pahlaj Nihalani, president, the Indian Film Exporters Association, has written to Yashwant Sinha thanking him for extending the income tax benefits also to non-corporate firms. He expected the export market to grow exponentially, thanks to the reliefs in IT granted to film software exports.

Nihalani, who is also the president of the Association of Motion Picture and TV Programme Producers, and the All India Film Producers Council, said the film industry was indebted to Sinha for the reduction of Customs Duty on studio equipment from 40 per cent to 25 per cent, on positive films in jumbo sizes and on negative films from 15 per cent to 5 per cent, all of which will benefit the ailing film industry. Similarly, raising the limit on payments that have to be reported under Section 285 (B) of the Income Tax Act from Rs 25,000 to Rs 50,000 will help the producers, he said.

Surinder Kapoor, president of the Film Producers Guild of India, also expressed happiness over the concessions granted to film industry. “The FM has kept his word. For just as he’d promised us at the pre-budget consultations, he’s heeded our demands,” he said.
Amit Khanna, chairman of the entertainment committee of the Federation of Indian Chambers of Commerce and Industry (FICCI), expected the film industry to gain Rs 25 lakh on an average of 300 prints per film. Similarly, on the import of negatives, producers stand to gain Rs 1.65 lakh per film. Khanna said the benefits accruing from the reduction in customs duty on the import of cameras, editing machines and so on, would add up to Rs
35 lakh, depending on the costs.

Khanna added, Last year, Rakesh Roshan had imported a camera worth Rs 1.5 crore when the customs duty was 40 per cent, which has now been reduced to 25 per cent. The tax relief is proposed to be diluted over the next five years. This implies that under 80HHC, the exporter will get a reduction of 800 per cent in the assessment year 2001-2002. Each following year will see an additional dilution of 20 per cent. Export profits under 80 HHC have been kept outside the perview of the newly amended MAT.

As regards the reliefs in Income Tax on earnings from export of films under 80 HHF granted last year, it was restricted to corporate bodies alone. The restriction has now been lifted, thereby allowing partnership firms and individual producers to benefit from the concessions.

MSM Desai