DTH Operators Seek Tax Rationalisation and Lower Duty on Set-Top Boxes

Ahead of the Union Budget of India, direct-to-home (DTH) service providers have asked the government to rationalise the tax structure for the sector and reduce the licence fee.

In a meeting with Minister of State for Information and Broadcasting Prakash Javadekar, the service providers said multiple taxation faced by the DTH sector is becoming a heavy burden.

"Till GST is not rolled out, the industry should get abatement in paying service tax. That is all that we are asking for. We are ready to pay taxes but we should not be taxed by the central government and state government both," Tata Sky CEO & MD Harit Nagpal told PTI.

The DTH industry has to pay entertainment tax to state governments and service tax to the centre, said Nagpal, who is also President of the DTH Operators Association of India.

Expressing similar views, Dish TV CEO R C Venkateish said: "No other industry pays double taxation and we have asked for abatement of the service tax".

He also asked for a reduction on the licence fee paid by DTH operators to six percent from 10 percent at present.

Casbaa, the cable and DTH industry body, said government must consider a cut in customs duty on STBs (set-top boxes) and its components. "The government should lower the customs duty on STB and bring it to the earlier five percent so that the boxes. The falling rupees against dollar has put huge pressure on the MSO in importing STBs," Casbaa Executive Director Anjan Mitra said.

The government had increased the customs duty on STB to 10 percent from 5 percent in the 2013 budget.

Responding to Javedkar's suggestions to DTH operators to lower subscription charges to increase subscribers, Nagpal said: "Our charges are lowest in the world. We are giving a basic package in Rs 220 only and out that 33 percent tax is taken by the government."

Nagpal said the further lowering of subscription rates would not be possible without lowering taxes imposed on the sector. Venkateish also said once the DTH sector gets tax relief, it would be able to pass the relief to the consumer.