With the Animation, VFX and Gaming industry growing at a very fast pace, the industry is asking for tax concessions and other sops from the government. The finance budget of the country is to be presented tomorrow, a few industry members voice their expectations from the Finance Minister (FM) in regards with the industry:-

“In my capacity as CM of FICCI Animation Forum for India and also part of the animation and gaming fraternity, my appeal to the honorable finance minister is to extend the section 10 A export tax benefit by at least 5 years so that the nascent animation and gaming export production remains competitive and grows at 30% plus p.a as envisaged by major trade bodies. Further removal of service tax on domestic animation and gaming and its domestic marketing will boost this creative industry. Also the domestic industry for few years must be given EOU benefits to import high end Hardware and Software at concessional duty to be competitive and also to produce highest quality.”

Tapaas Chakravarty, DQ Entertainment

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“Our expectations from this year’s budget remain relatively the same as last year, whereby we would like tax holiday for the Indian film and entertainment industry. Just like in I.T and I.T.E.S we would like for special tax concessions towards facilitating greater exports from India. This would help in strengthening the future potential and opportunities for the media sector which is at an inflection point.

According to PricewaterhouseCoopers (PwC) Global Entertainment and Media Outlook, India is ranked as the fastest growing market in the world for spends in entertainment and media in the next five years. India will be one of the key drivers in pushing the global entertainment and media industry to US$ 2 trillion by 2011.

As entertainment and media companies like us expand their operations and create content globally, complex tax issues can act as a drag on their operations and depress profitability. From the Budget 2008-2009, the entertainment industry is bullish about the government’s plans to bring about structural changes in the sector, thereby catapulting India to the top league of the global entertainment space.”

Namit Malhotra, Managing Director, Prime Focus

“Monetary policies of this government have been effective, however not very conducive to encourage entrepreneurship. With myriad taxes of various forms and various business compliances making small and medium businesses difficult to run, I would definitely like to see a single form of direct taxation and relaxation of lots of bureaucratic rules which are more hassling than facilitating running of businesses.

For the animation industry specific, I would definitely love to see tax breaks for the nascent animation industry, exemption from service taxation and investments/sops in animation educational institutions. Allocating land free of cost to bonafide animation trusts to start up institutes like NID specifically for animation would be a great start.”

Kireet Khurana, Director, 2nz Animation Co.

“Our key concerns are the lack of clarity of the regulation on on-line digital item purchases (music, movies, game items) and services taxes. There is much confusion about what tax between VAT, service tax and sales taxes to be applied for digital items sales and services. because there is no clear directions in the budget and the law the tax administrations (each of them) tend to claim they can apply the taxes and it is unclear the level of liability some of our on-line businesses are exposed to. Another issue is the lack of standard regulation around India for goods transfers within India. Excises etc are a huge drawback to doing business in India. Finally the complexity of the tax and employment regulation makes employing anyone a very challenging tasks. Last but not least the import taxes rates should be lowered and number of categories reduced and entertainment taxes should be simply banished.

I do not believe the industry need government incentives to grow. Regulations that are simpler, reduced administrative burden and better governance are what will help any economic sector to grow faster and better.

But ultimately is that very important given that up to 20% to 70% in certain sates of government expenses are pocketed by corrupted officials. Graft and corruption are the real problems that need to be tackled in order for this to make any sense.”

Quentin Staes-Polet, Kreeda Games

“India is at a key moment of opportunity with the Animation, VFX and Gaming industries growing at a phenomenal pace. If the upcoming budget includes industry encouraging measures, including tax breaks, then the speed of growth and ability to compete in the world market will be greatly enhanced. This would be a good time to examine how the Canadians have built such an impressive animation business with the assistance of their government. It would also be key to consider how the strength of the rupee is adversely affecting outsource business in these verticals.”

Greg Acuna, PalaFlicks

“I believe that there is going to be a fair amount of money which is being allotted for new Technology training and promotion. I recommend that some grants be given to the recognised local chambers of commerce, like MCCIA etc, so that like NGO participation, these Chambers can drive the new technology initiative.”

Commodore Anand Khandekar, MCCIA, Pune

“Tax breaks; Backing ( Primary amongst them is Access to Quick Finance and Business Know-how); An economical ecosystem for the Small Entrepreneurs with strong business models to Develop, Grow & Compete…is what I expect from this year’s budget.”

Harold Raichur, ID Animations & Art

“Since I am closely connected with education in animation and seeing the dearth of well trained animators in the industry, I would say that the government should provide impetus to animation training institutes which work, not with a commercial agenda, but with passion to create talented and well trained work force for our already booming animation industry.”

Tehzeeb Khurana, ToonClub

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