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Home / News / Entertainment News / Rollback TDS hike, Tamil film producers write to Finance Ministry
Entertainment

Rollback TDS hike, Tamil film producers write to Finance Ministry

Rollback TDS hike, Tamil film producers write to Finance Ministry
Written by Shreya Mukherjee
Jun 17, 2021, 11:27 am 2 min read
Rollback TDS hike, Tamil film producers write to Finance Ministry
The 'sudden' hike in TDS can impact the livelihood of lakhs, fear film body

Producers who are working in the Tamil film industry have appealed to the Union Finance Ministry recently to take back the "sudden" imposition of an increased Tax Deduction at Source (TDS). The jolting increase to 10% from from 2% in TDS on the distribution of cinematographic films has come as a "shock," and they fear it can "lead to closure of the film industry."

Letter
They estimate investments worth over Rs. 1,000cr are stuck

Writing to FM Nirmala Sitharaman, TG Thyagarajan, treasurer of the Tamil Film Active Producers Association (TFAPA) and CII Media & Entertainment (South) chairman, said the industry never got the chance to revive fully in 2021 because a fresh lockdown was imposed. As per his calculations, investments amounting to Rs. 1,000 crore across 120 films remained stuck in the Tamil industry alone during the lockdown.

Quote
'Sudden imposition of 10% TDS has come as big shock'

As theaters barely opened in 2021, producers have not been able to pay the interest on these investments and are "suffering." "The sudden imposition of 10% TDS under Section 194-J on professional royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic films has come a big shock to the entire industry (sic)," the letter read.

Data
'Film entertainment segment declined by 40% in 2020'

Citing data from a joint report by FICCI and a global consultancy firm EY, which was published in March this year, Thyagarajan said the "film entertainment segment" had declined by 40% in 2020 in comparison to the numbers for 2019. The fall from Rs. 11,900 crore to Rs. 7,200 crore in a year is likely to see another 25% decline in 2021, he added.

Information
A 60% decline is expected to hit by 2021 end

"In 2021, the film entertainment segment may decline further by another 25 percent and touch a level of around Rs. 5,000 crore turnover, which means, the industry would have declined by 60 percent in the last two years," TFAPA wrote to the Finance Ministry.

Appeal
Producers want the rate to be back at 2%

To note, the TDS on royalties related to cinematographic films was at 2% till March 2020 and was later reduced to 1.5% during the pandemic. TFAPA appealed to set the TDS at 2%, which can otherwise affect the livelihood of lakhs. Separately, the Indian Motion Picture Producers' Association (IMPPA) had earlier requested the Maharashtra government to organize an exclusive vaccination camp for its members.

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Shreya Mukherjee
Shreya Mukherjee
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Shreya Mukherjee covers entertainment news for NewsBytes. She has previously worked with The New Indian Express as a sub-editor where she also contributed lifestyle and feature articles. She has a Bachelor’s degree in English from the University of Calcutta and a postgraduate diploma in Journalism & Mass Communication from the Indian Institute of Mass Communication, Delhi.
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