Tax Burden on Film Industry

Updated on: 7 February 2024 7:32 pm

Since 1995, the industry has been deprived of the 100 per cent tax exempton on export earnings that it should have been entitled to under Section 80HHC of the Income Tax Act. The IT department’s rather specious argument is that export of film software doesn’t amount to export of goods merchandise.

Countervailing duty on the import of raw stock even though it is not manufactured in India

For a shoot ahead, a producer has to earn foreign exchange equivalent of 200 per cent of the amount spent on filming plus the entire airfare and baggage charges paid in rupees to any airline. Foreign exchange is sanctioned only after he deposits the stipulated amount in a bank or furnishes a bank guarantee. The money remains blocked until the film is in the cans and the stipulated forex earning is brought bck to India.

Entertainment tax imposed by state governments. It varies from 50 per cent in Maharshtra to 167 per cent in Bihar.