MUMBAI: An on-going standoff between the home video companies and TV channels on one side and the Customs on the other has been brewing over the last few weeks.
According to information available with Businessofcinema.com, the Customs is levying additional duty on import of Beta Tapes and DLTs (Digital Linear Tapes), failing which the companies will not receive their consignments.
Beta Tapes and DLTs are essentially required by home video companies for replicating VCDs and DVDs, respectively. TV channels airing dubbed English movies require beta tapes of movies to dub them. Home video companies such as BIG, Excel Home Video, Moser Baer, Saregama, Shemaroo Entertainment, Sony, UTV and channels such as Zee, Sony, Star Gold, Bindaas amongst others are likely to face hindrances in case of further delay in resolving the matter.
"Our consignments have been with the Customs since the last three to four weeks. Our previous lot of movies is under processing hence our company hasn’t suffered any losses until now. But the dent may be felt April-May onwards," says the home video head of an international company.
Until now, companies were paying 35 per cent duty towards the import of material (Beta Tape and DLT). Now they are required to pay an additional duty towards the copyright/royalty for matter stored on this material. The import of analog prints will not suffer the charge of extra duty, but only the import of electronic related goods Beta and DLTs fall under this.
"The Customs are not even giving us a definite reason for a hike in the duty. There is a lot of ambiguity," says the home video head of a company that licenses content from Hollywood studios.
If at all the additional duty is levied onto the companies, it may lead to far reaching financial implications and may require companies to readjust their acquisition rates for the future. In some cases, the additional costs may be passed onto the consumers as well. "Since this is an industry-wide problem, we expect an industry-wide solution", says the head of a home video company. Currently the various companies are negotiating with the Customs, but there is no certainty on when a decision is likely to be taken. Companies have been approaching this through the Motion Pictures Association (MPA) and also at an individual level.
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