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Richa Mishra

New Delhi , Oct. 26

SET-TOP boxes (STBs) have certainly generated as much interest as any of the daily soaps being aired on television channels among its stakeholders — consumers and manufacturers alike.

Faced with stiff competition from China, Korea, and Europe, due to concessional rates offered on imported STBs and low demand, the indigenous consumer electronics industry, which had welcomed the implementation of Conditional Access System (CAS), is now finding itself on rickety ground.

"Unless CAS is fully implemented there is absolutely no justification in further extending the concessional duty on STBs," they are quick to point out. In fact, the industry has urged the Finance Ministry not to extend the duty concessions. The import duty on STB was lowered to five per cent in May this year to facilitate the roll out of CAS across the metros. The Government had initially set July 31 as the deadline for allowing the concessional duty rate, but later extended it to September 30.

Customs duty was reverted to 50.8 per cent from October 1, since the notification had lapsed. The Government is contemplating to once again lower the customs duty on imported STBs to five per cent and the rate will be applicable from the date it is notified till December 31.

CAS has been implemented only in Chennai and fresh date for implementation in other three States is yet to be notified. "The sale of STBs in Chennai has been of very limited quantity around 13,000 only. In fact, one of the company's has an inventory of 50,000 pending," says Mr Anoop Kumar, Chairman, CAS Council, Consumer Electronics & TV Manufacturers Association (CETMA).

"Sufficient stocks of STBs exist in the country to take care of the requirement of three metros, viz. Delhi, Mumbai and Kolkata, should CAS get implemented in the next couple of months. Once the date for implementation of CAS is clearly indicated, the indigenous industry would be able to produce required number of STBs, to meet the additional demand," he pointed out.

"The Government has taken a progressive step to introduce CAS, to make the cable TV system transparent, for the benefit of consumers. The indigenous consumer electronics industry is making `state-of-art' consumer electronic products," he stated. Agreeing that earlier STBs were not being manufactured in the country, as there was no requirement for it, Mr Kumar pointed out, "However, with the likely introduction of CAS and DTH in the country, the industry has already started manufacturing of analog STBs".

"Our members have geared up for the production of digital STBs as well. But for the industry to start production, there should be a demand for STBs. There is a need for clear-cut government policy for CAS implementation in the three metros. There has been so much confusion and uncertainty, that some of our members, who have made huge investments, are unsure if CAS would be implemented in the foreseeable future," a CETMA official said.

Further, instances of misuse of the concessional rate of customs duty on STB have also been reported. Unscrupulous elements have been reported to import items such as VCDs, STBs for use other than CAS, etc by misdeclaration. "This is not only damaging indigenous industry, but resulting in loss of revenue for the Government as well," Mr Kumar said.

In fact, whenever the Government takes any view on the duty structure, industry associations such as CETMA must be consulted, they point out.

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