Industry & Economy
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Taxation
Duty cut on set top boxes proposed
Our Bureau
New Delhi, Feb 26 The Telecom Regulatory Authority has asked the Ministry of Information and Broadcasting to push for a reduction of Customs and Excise duties on set top boxes, their spare parts and digital head end equipments to be brought down to zero per cent from their present rates.
The Minister, Mr P.R. Dasmunsi, informed the Lok Sabha on Tuesday, that the recommendation amongst others has been forwarded to the Finance Ministry which has been “requested to constitute committees to study the present structure of levies on broadcasting, DTH and cable sector on the one hand and the film industry on the other.”
The reduction of duties has been a long standing demand of the broadcasting industry. For example, the DTH industry which pays an excise duty at 16 per cent on the set top boxes, has been asking for rationalisation reduction to eight per cent.
According to the industry, the end-consumer price has a tax component aggregating a prohibitive 56 per cent, leading to the entry cost to a subscriber being disproportionately high. The DTH service provider currently pays a licence fee of 10 per cent of the adjusted gross revenue, service tax of 12.36 per cent on subscription fee revenue and an entertainment tax.
In other words, calculate DTH operators, for subscription revenue of Rs 200, they pay Rs 95 in taxes and levies. They point out that their service is simultaneously being taxed for being an entertainment activity and a service too. Classified as Broadcasting Services, they pay a service tax and an entertainment tax which varies ranging from 20 to 30 per cent depending on States.
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