Televisionpoint.com Team Defining it as 'alarming' and 'retrograde' the government proposal to apply service tax on sale of advertising space, the Indian Newspaper Society on Monday said the move has no legislative sanction and could have a 'disastrous effect' on the newspaper industry.
Jacob Mathew, President, INS said that a 10.2 per cent tax on value of advertising space, as proposed in the Finance Ministry's draft circular of October 10, will stunt the growth of the newspaper industry, and therefore should be dropped.
MR Mathew said the Central government had in 1996 exempted advertising space-selling from taxation while imposing service tax on the advertising agency business.
"But the new 'alarming' and 'retrograde' proposal, which has no legislative sanction, can have a "disastrous" effect on the Indian newspaper industry besides adversely affecting advertising revenues of the newspapers and burdening the readers," he said in a statement.
The proposed tax, MR Mathew said, also 'undermines' the right to freedom of speech and expression and urged the Centre to drop the proposed levy to allow Indian newspapers to grow freely.
"The Constitution honours the press as one of the four pillars of democracy, and newspapers are exempt from Central Excise and sales tax as they are not considered mere commodities," he said.
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