DTH needs tax relief

Oct 25 2013, 02:51 IST
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SummaryThe many central and state taxes on DTH erode its competitiveness against cable and cinema

The challenges faced by the direct-to-home (DTH) industry are classic examples of how a flawed taxation structure can seriously impede growth of an otherwise promising industry. Such a superior technology for entertainment would have become unaffordable to the masses when compared to the services offered by cable TV operators of which the distribution is run mostly by unorganised players. Almost 50% of the subscription collected from the Indian public by DTH operators is the pass through of license fees and taxes imposed by the state and central governments! No other industry is penalised like this, except for the alcoholic beverages or the tobacco industry. As a result, the less-taxed cable TV industry is thriving at the cost of the government and public and the DTH industry is bleeding despite providing a technologically superior and better product.

At present, DTH or cable TV entertainment has become part of each and every household. In the past two years, DTH technology has taken a giant leap and has established itself sturdily in an analogue-cable-dominated market. It has revolutionised the TV viewing experience in the country by providing superior technology (digital picture quality and stereophonic sound) in comparison to analogue-cable TV. DTH, being a satellite-driven technology, has reached the remotest areas of the country where cable TV is unviable due to geographic conditions. Apart from that, DTH also offers variety of value-added services to viewers such as freedom to choose channels, movie-on-demand, electronic program guide, etc, which is not available with cable TV. Thus, technologically, DTH is superior alternative for viewers compared to analogue-cable connection and hence, it is crucial to give a boost to DTH technology which will be in the best interest of the public which has the right to receive the best products at competitive rates.

Furthermore, promotion of digitisation, or DTH, is also in the interest of the government as well as the broadcasting sector. This is because, under cableraj, the prime concern of the broadcasters as well as of the government is under-reporting of subscriber numbers by cable operators, which means loss of revenue for broadcasters and leakage of tax revenue for the government. The cable TV distribution is highly unorganised and is dominated by antisocial elements in most part of the country. Various surveys have shown that cable operators disclose not more than 10% of the actual subscriber numbers, leaving the large pie of subscription revenue untaxed. In

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