IndianMascot
Core Member
High taxation in the direct-to-home (DTH) sector is a fundamental issue that the industry has been talking about for quite some time now. While numerous representations have been made to the central government, the finance ministry and various state governments, unfortunately, they don’t seem to understand the rationale and the need for it. With respect to the entire cable and satellite (C&S) space, the government has not been able to quantify digital cable industry’s realisation, mainly due to lack of transparency, which is a well-known fact and the main reason for initiating the digitisation exercise.
It’s been almost a year since digitisation kicked off and while there is some sense in the market in terms of seeding of set-top-boxes (STBs), the original intent of bringing in transparency and tax revenues into the system has not materialised at all. This is because till date not a single multi-system operator (MSO) is paying any entertainment and service tax in proportion to the STBs being seeded. They continue to pay the some token amount and are trying to pass the buck between the multi-system operator and the local cable operator (LCO).
This whole exercise has been fairly futile because if one looks at the total collection of entertainment and service tax in the entire C&S space, the DTH industry contributes to over 80% despite being under 30% of the total subscriber base. So, this is the constituent that needs to be encouraged with supportive tax scenario. Instead, they are doing everything to squeeze the livelihood out of the DTH industry. If the government can bring down taxation and make the DTH industry more viable, their net gross tax collections will improve because the DTH industry will redeploy the funds to expand and grow the market.
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