Stories
Can Lower GST on TV, OTT and Music Boost India's Entertainment Industry?
- •The Confederation of Indian Industry has urged the government to reduce GST on television, OTT, and music subscriptions from 18% to 5%.
- •The proposal aims to help India's media and entertainment sector reach its ambitious $100-billion growth target by the early 2030s.
- •A reduction from 18% to 5% could lower a Rs 118 subscription bill to Rs 105, provided providers pass the savings entirely to consumers.
- •Experts debate whether the tax cut will genuinely create new subscribers and advertising reach or simply reduce tax on existing consumption.
- •Policymakers will need to weigh the fiscal cost of lost tax revenue against the potential economic benefits of increased consumer spending.
Key Questions Answered
The Confederation of Indian Industry (CII) has urged the government to reduce the Goods and Services Tax (GST) rate on television, over-the-top (OTT), and music subscriptions from 18% to 5% to improve industry economics and affordability.
On a subscription priced at Rs 100 before GST, an 18% rate results in a final bill of Rs 118, whereas a 5% rate lowers the bill to Rs 105, assuming the provider passes on the entire reduction. This provides a savings of Rs 13, or about 11% of the existing tax-inclusive bill.
Policymakers need to resolve three key questions: the fiscal cost and revenue forgone, evidence that lower prices will generate genuine affordability-led growth rather than shifting existing spending, and how the rate should uniformly apply across different services and business models.
