The information and broadcasting ministry on Monday sought tax sops for black and white TV, certain equipment, analog radio receiver, pre-recorded audio CDs and set-top boxes, while demanding that service tax should be modvatable in the forthcoming Budget.

In a pre-budget meeting with Finance Minister Jaswant Singh, Information & Broadcasting Minister Sushma Swaraj presented the list of demands that she said would ensure high growth in the entertainment sector.

"Tax relief was necessary as the sector was growing by 30 per cent with exports surging from Rs 200 crore (Rs 2 billion) to Rs 1,000 crore  (Rs 10 billion) now," she told reporters after the meeting, also attended by entertainment and print industry representatives.

The minister pointed out that certain equipment used by the IT sector was getting tax relief but the same items imported by broadcasters and entertainment industry was taxed at a higher rate. This discrimination should go or at least the items should be taxed at the lowest duty rate, she said.

In case of set-top boxes required for viewing pay-channels under the new Cable amendment, she said: "There should be excise and customs exemptions for two years."

These tax breaks were necessary to bring down the cost of set-top boxes for the 40 million cable television viewers.

The ministry demanded duty exemptions for black-and-white TVs and analog radio receiver as it has bearing on the lower strata of the society, Swaraj said.

To counter the piracy of audio CDs, the minister sought duty exemptions which would bring down the cost of such items.

She also said service tax on entertainment industry should be modvatable.

Run-up to the Budget 2003