IBDF and IDMIF call for pro-growth tax reforms in the Union Budget 2026–27

The Indian Broadcasting & Digital Foundation (IBDF) and the Indian Digital Media Industry Foundation (IDMIF) have urged the government to use the Union Budget 2026–27 to overhaul the tax framework for India’s media and entertainment sector, highlighting that high GST rates, working-capital constraints, and ongoing litigation are limiting investment capacity.

In submissions to the Ministry of Finance on direct taxes and GST, the bodies called for a predictable, growth-oriented regime that reduces disputes, eases compliance, and frees up cash for reinvestment. They pointed out that linear TV is under pressure from rising costs, cash-flow challenges, and shifting advertising patterns, while digital media requires clearer rules as evolving platform models and layered supply chains create ambiguity and disputes.

Kevin Vaz, President of IBDF & IDMIF and CEO – Entertainment, JioStar, said, “Television and online curated content services are essential mass-access platforms, providing entertainment, sports, news, and learning to millions of households. As the media ecosystem undergoes structural changes, the tax framework must reflect the public value and scale of these services.”

He added, “A more rational and contemporary GST approach can make subscriptions more affordable, encourage wider adoption, and enhance disposable incomes, particularly in price-sensitive markets. Such reforms would boost consumer demand, strengthen the media and entertainment value chain, and support national priorities such as Digital India, ease of doing business, and inclusive growth.”

Avinash Pandey, Secretary General of IBDF, noted, “Our submission is guided by a simple principle: affordability drives accessibility. Lower subscription costs amplify the power of media to inform, educate, and unify the nation. Rationalising GST is not merely a fiscal adjustment—it is an investment in a more connected and digitally inclusive India. It will put money back in consumers’ hands, stimulate the creative economy, and ensure that television and digital platforms remain accessible to every household, truly supporting a self-reliant and digitally empowered society.”

Key GST proposals include reducing taxes on TV and digital subscriptions from 18% to 5%, arguing that the current rate hurts affordability and adoption while creating inconsistent treatment across platforms. The bodies also called for parity to ensure similar services are not taxed differently based solely on the medium.

Alongside a rate cut, IBDF and IDMIF sought reforms to address inverted duty structures and stranded credit risks. Suggestions include allowing refunds on input tax credits if output GST is reduced, or rationalising GST on key inputs like content and sports rights, so relief does not exacerbate liquidity stress. They also urged linking GST liability on services supplied to government entities with actual receipt of payment and permitting the use of input tax credit to discharge Reverse Charge Mechanism obligations to reduce upfront cash outflows.

To simplify compliance for pan-India operators, the bodies proposed an LTU-like mechanism under GST for large taxpayers to consolidate scrutiny, reduce multi-state audits, and ensure consistent notice management. They highlighted GSTN issues affecting restructurings, including state-based validations for Form ITC-02, and called for clarifications on complex digital advertising supply chains, where taxability and valuation disputes can arise. They also opposed extending B2C e-invoicing to OTT subscriptions, citing high volumes of low-value payments, and sought clarity on local body entertainment taxes to prevent overlaps or dual levies.

On direct taxes, IBDF and IDMIF requested reforms to support consolidation, reduce cross-border disputes, and improve liquidity. They proposed amending Section 72A of the Income Tax Act to explicitly allow carry-forward of losses in mergers and amalgamations for the media sector, aligning it with other service industries. They also sought resolution of disputes around withholding tax on transponder hire charges by aligning India’s definition of “royalty” with tax treaties. Procedural simplifications for non-residents were recommended, including easing mandatory e-filing of Form 10F.

Liquidity-focused measures include a timeline-driven process for income-tax refunds, issuing lower withholding tax orders (Form 13), and permitting modifications to existing lower-TDS certificates without losing validity.

IBDF and IDMIF framed Budget 2026–27 as a critical test of whether the tax system will support sector reinvestment. They urged the government to pair affordability-led GST reform with faster refunds and dispute reduction, warning that without regulatory certainty and cash-flow relief, the sector’s ability to invest in content and technology upgrades will remain constrained.