Duty cuts to drive digitalisation

New Delhi | Updated on March 12, 2018 Published on February 21, 2011

DTH antennae on sale in Kochi. Photo: Vipin Chandran..   -  The Hindu

Reeling under the impact of multiple taxes, the broadcasting industry is looking forward to rationalisation of taxes in the forthcoming Budget. This would give a fillip to the digitalisation process and pave way for a more organised cable sector, besides helping the direct-to-home (DTH) operators attract greater institutional funding.

The industry wants the Government to bring down all types of duties on digital set-top-boxes (STBs) to zero for a period of three years. Currently, the STBs attract customs of five per cent, a special additional duty of 4 per cent and countervailing duty (CVD) of 8 per cent and excise duty of 10 per cent. Removal of duties would reduce the cost of STBs by about Rs 187, resulting in accelerating the pace of digitalisation.

Besides, the industry feels the basic customs duty on digital head-ends or broadcasting equipment, which currently varies from 7.5-10 per cent should be brought down to zero.

The industry is of the view that increasing digitalisation would bring in more revenue to the Government as declaration levels would go up in terms of subscribers, resulting in higher collections through service and corporate tax. The expected revenue gains from the digital penetration will be much more than the revenue loss, the industry claims.

Though local manufacturers want the Customs duty to be enhanced and continued on imported STBs as they feel it would encourage domestic manufacturing, DTH operators feel that the current ecosystem is not up to the mark to meet the current demand. Stating that DTH industry has been suffering from multiple taxation with a tax incidence of over 40 per cent, Mr Salil Kapoor, COO, Dish TV, called for rationalisation of licence fee and the entertainment tax charged by various State governments. Licence fee, which stands at 10 per cent of the revenues, should be brought down to six per cent.

The Entertainment Tax ranges between 5 per cent and 25 per cent in various States. Stating that television was playing a major role in inclusive growth like a personal computer and broadband, Mr Kapoor said the entertainment tax should be subsumed in GST.

multiplex operators

The multiplex operators have sought an exemption of levy of service tax on property rentals and on the payment made by them to distributors for exhibition of films. This would help them expand to smaller towns.

Similarly, the film producers have asked exemption of 16 per cent CVD on unexposed colour cinematographic films, which would help them combat piracy by making more film prints at an affordable cost.

The animation and gaming industry has sought a 10-year tax holiday and removal of service tax on studios developing original content.

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Published on February 21, 2011
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