FICCI-KPMG-Report-13-FRAMES

Recommendations

Info

76 The power of a billion: Realizing the Indian dream State Maharashtra Entertainment Tax (as percentage of ticket price) 45% for tickets under INR250; 49.5% for tickets priced at INR251-350; 51.75% for tickets at INR351-500; 54% for tickets INR501 and above Note Marathi films a re tax free Bihar 50% Karnataka 40% Kannada films are tax free Uttar Pradesh 30% for ticket up to INR10; 35% for tickets between INR 10-30; 40% for tickets exceeding INR30 West Bengal 30% 2% for films in Bengali, Santhali and Nepali language Haryana 30% Kerala 30% Orissa 25% Gujarat 20% Delhi 20% Madhya Pradesh 20% Andhra Pradesh 20% 15% for Telugu films © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Tamil Nadu 15% Tamil language films are tax free Assam 15% for tickets less than INR 20; 20% for tickets more than INR 20 Jharkhand Punjab Jammu and Kashmir Rajasthan Himachal Pradesh Entertainment Tax exempted for the period April 2012 to March 2013 Tax Free Tax Free Tax Free Tax Free Madhya Pradesh 20% Source: ‘Entertainment Tax In India’ Taxindia.com, August 2012, ‘Gross and Nett Gross: The Difference’, Indicine.com, September 2012 Earlier it was 110%
The power of a billion: Realizing the Indian dream 77 Film actors, artists, technicians, distributors (for nontheatrical rights) etc. are liable to pay service tax thereby increasing the costs of movie making. Service tax on lease of immovable property is another financial burden for exhibitors. Exhibitors for cinematographic films are not liable to service tax. Accordingly, taxes paid on input side including service tax on immovable property becomes a cost for exhibitors and is not creditable. Separately, it will be useful to provide tax holiday benefits for infrastructural development on setting up cineplexes in tier II and tier III cities to incentivise the sector and boost growth and development of such cities. Themes of the future Upcoming trends in film financing The advent of organized funding Sourcing of film financing has been largely unorganized due to high risk nature of the business. However, with scaling up of revenues, Indian films are increasingly attracting private equity / venture capital funding from institutions directly. Cinema Capital, a venture capital fund focused on the film and entertainment sector has recently funded films like ‘Heroine’, ‘Bol Bachchan’, ‘Chakravyuh’ and ‘Dabangg2’. Highground Enterprises, Magus Entertainment and Springboard Ventures are some of the other venture capital firms investing in Indian films 60 . After a lull in interest from film funds and other venture funds’ interest in the film business, 2012 saw a revival of interest. “ The Indian film industry, in its centenary year has been challenged by the levy of a plethora of taxes, a majority of which constitutes the Indian indirect taxes. The growth of the film industry seems to have stagnated in terms of revenues over the past few years and may continue to be affected in the long term on account of multiplicity of taxes levied at each stage of film production and distribution. Film industry has also voiced its concerns to the Government authorities over the proposed Goods and Service Tax (‘GST’) legislation which proposes to keep entertainment tax outside the purview of the GST, thereby forming an additional levy over and above the GST. The film industry believes that such additional levy of entertainment tax shall defeat the purpose of the GST which seeks to achieve uniformity in indirect taxes and put the film industry back in the state of apathy in which it currently is. While, the representations of the film industry to the Government authorities continue, the Film Industry eagerly awaits the introduction of the GST to bring about relief to the film industry from the current state of affairs. “ - Kulmeet Makkar Chief Executive Officer, The Film & Television Producers Guild of India Ticket price controls Ticket pricing in many states is regulated by state governments. In Tamil Nadu, single screen theatres are allowed to charge a maximum of INR 50 per ticket and multiplexes can charge a maximum of INR 120 per ticket depending on the set of facilities. In Andhra Pradesh, a proposal to hike cinema ticket rates in single screens from INR 10 to INR 25 and INR 60 to INR 75 has currently been put on hold 59 . The industry expects the governments to relax regulations on fixed number of shows and cap on ticket pricing and let the exhibitors decide on the admission rates according to demand. Flexible pricing will also help to reduce black-marketing of tickets since theatre owners will have freedom to revise the rates according to the audience inflow. DAR Media Private Limited, a Mumbai-based film production and distribution company, and MentorCap Management Private Limited, an investment advisory firm, have got an INR 1 billion film fund approved under the new alternative investment funds (AIF) guidelines laid down by Securities and Exchange Board of India (SEBI) 61 . AIFs are funds that pool local and overseas capital and invest according to a stated policy. The DAR MentorCap Film Fund will identify film projects with a budget of between INR4 crores and INR30 crores, and find a pool of investors to back them 62 . Bani Banerjee, a veteran with The Chatterjee Group (TCG), is also launching a private equity fund worth INR 2 billion to fund film and entertainment projects 63 . This indicates the growth of organized film financing for the film industry, and is expected to sustain and grow in the years ahead. 59. Proposal to hike cinema ticket rates put on hold, The Hindu, January 17, 2013 60. ‘Where Bollywood Gets Its Mojo’, Openthemagazine.com, November 2012 61. DAR MentorCap gets Sebi approval for Rs 1 bn film fund’, Indiantelevision.com, November 2012 62. ‘DAR Media, MentorCap launch Rs.100 cr film fund’, Livemint.com, October 2012 63. ‘TCG veteran to launch PE funds in realty, films’, Business Standard, January 2013 © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Page 1 and 2:
This heading style is set in Univer
Page 3 and 4:
The power of a billion Realizing th
Page 5 and 6:
Radio too, is set for the - roll ou
Page 7 and 8:
42 Print Regional to the rescue 58
Page 9 and 10:
01 The power of a billion: Realizin
Page 11 and 12:
The power of a billion: Realizing t
Page 13 and 14:
Page 15 and 16:
02 Introduction The power of a bill
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28: The power of a billion: Realizing t
Page 59 and 60: 57 Hiring and retaining talent The
Page 77: The power of a billion: Realizing t
Page 91 and 92: 05 The power of a billion: Realizin
Page 95 and 96: The smartphone is a very sophistica
Page 109 and 110: “ With brand advertising gatherin
Page 111 and 112: Music The success of the iTunes mod
Page 117 and 118: 06 Round up of the year that was Th
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
FICCI 2013 143 “ The Amendments t
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
© 2013 KPMG, an Indian Registered
Page 161 and 162:
09 Outlook for the year The power o
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
11 Technology The power of a billio
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
© 2013 KPMG, an Indian Registered
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Acknowledgement We acknowledge the
show all

FICCI-KPMG-Report-13-FRAMES

Create successful ePaper yourself

Delete template?

Save as template?