Union Budget 2024: Key Highlights For The Media And Entertainment Sector

On July 23, 2024, the Hon’ble Finance Minister presented the Union Budget 2024 in the Lok Sabha, unveiling significant reforms aimed at bolstering the media and entertainment sector. This year's budget introduces several changes designed to foster growth, encourage investment, and streamline taxation in the industry. Here are the key highlights:

Withdrawal of 2% Equalisation Levy (EL) on E-commerce Supply or Services:

One of the most notable changes in the Union Budget 2024 is the withdrawal of the 2% Equalisation Levy on e-commerce supply or services. This levy, introduced to tax digital transactions and level the playing field between domestic and foreign e-commerce operators, has been a point of contention. Its removal is expected to ease the tax burden on e-commerce companies, potentially reducing costs for consumers and encouraging more robust e-commerce activity in India.

Reduction in Tax Deducted at Source (TDS) Rate on E-commerce Transactions:

In a move to further support the e-commerce sector, the budget reduces the Tax Deducted at Source (TDS) rate on e-commerce transactions from 1% to 0.1%. This significant reduction aims to improve liquidity for e-commerce businesses, enabling them to reinvest more capital into their operations, enhance services, and expand their market reach.

Reduction in Corporate Tax Rate for Foreign Companies:

The corporate tax rate for foreign companies has been reduced from 40% to 35%. This measure is expected to attract more foreign investment into India's media and entertainment sector, making it more competitive globally. The reduced tax rate will likely incentivize foreign media companies to establish or expand their presence in India, leading to increased job opportunities and technological advancements in the sector.

Extension of Basic Custom Duty Exemption for Motion Picture, Music, and Gaming Software:

The budget also extends the basic custom duty exemption on motion picture, music, and gaming software for use in gaming consoles, printed or recorded on media, until March 2026. This exemption is a crucial step in supporting the creative and gaming industries, reducing costs for producers and distributors, and making high-quality content more accessible to Indian consumers. By extending this exemption, the government aims to promote the growth of these sectors, encouraging innovation and the production of diverse content.

The Union Budget 2024 presents a forward-looking approach to supporting the media and entertainment sector. By withdrawing the Equalisation Levy, reducing TDS rates, cutting corporate taxes for foreign companies, and extending custom duty exemptions, the government demonstrates its commitment to fostering a vibrant and competitive media landscape in India. These measures are expected to stimulate growth, attract investment, and enhance the overall dynamism of the sector, positioning India as a global hub for media and entertainment.