DTH players cry foul as taxes mount

[disher]

Direct-to-home (DTH) operators have urged the government to rationalise the taxation structure on DTH service. In a letter to the Information & Broadcasting ministry, Essel Group’s Dish TV has said that even though DTH is considered to be a nascent segment, the levy of taxes by various government departments works out to be about 50%.

The DTH operator has asked the government to categorise DTH players as service providers and thus entertainment tax should not be applicable on the sector.

At present, the DTH services are subject to multiple taxation which include a license fee of 10% on gross revenue to the I & B ministry. Then there is a 12.3 % service tax charged on the subscription fee revenue earned by the DTH service provider.

In addition, entertainment tax in the range of 20-30% is collected by different states on subscription revenue earned by the service provider. Also, there is about 12.5% sales tax levied on the purchase of hardware by the consumer. “The cumulative impact of all these taxes on DTH service revenue is 47.5% apart from 12.5% on the hardware,” the letter pointed out.

Dish TV managing director, Jawahar Goel said, “DTH has been categorised as service and any tax on services falls within the domain of Union government. We have already been charged a 12.36% service tax. In addition to the service tax, states are charging entertainment tax which has led to the double taxation. This needs to be corrected.”

Earlier, Tata Sky also said that there is a need to rationalise the tax structure on the operators. It’s CMD Vikram Kaushik had pointed out that the high level of taxes on revenues and on the set top box is “punitive”. The industry players believe that high taxes would lead to the segmentation of DTH as a premium service and not a mass-market service.

According to a recent study released by the E & Y and Assocham, DTH is likely to drive the digitisation wave in the Indian entertainment industry with about 28% of the 110-million television households expected to migrate to DTH. According to the E & Y estimate, the subscriber base of DTH is likely to touch 19 million from the current 4-5 million subscribers which include DD Direct free service.

Source @ DTH players cry foul as taxes mount- Entertainment-Media / Entertainment -News By Industry-News-The Economic Times

 

[kunal_janu]

Very true.. Given the amount these guys are paying as taxes these people will have to charge more from the customers to survive in the industry for a longer period. I hope tha government is taking notice of this and doing certain things with the end customer in the mind..Rs.30 for crap chaneels like bindass,9X, Ndtv good times etc.. these channels should be offered for free to increase TRP's relating to various shows running on these channels. Who the hell will buy another pack..Incresing channels is seen, But we forget that after a period of 3 months these channels are being moved to certain packages thereby increasing our cost of subscription, i'm sure the day not far when all channels will be offered at 500INR a month.. Rediculous TS..

 

[ItsMe]

Idiots... Killing the goose for the golden egg. When the govt. will understand the difficulties of running an establishment. Chidambaram sir... are you listening?

 

[~Hami~]

do u know one thing, finance minister p.chidambaram is the main cause of increasing the coffee rates becoz he is having coffee estate :madness: . dowe need this kinda person in govt. ?

 

[gregory house]

Taxes. Some state once wanted to impose sales tax (I think) on telephone calls. And Bombay Municipal Corporation once tried to levy octroi (chungi - sounds like a pinch, and hurts like one too) on the cost of aeroplanes purchased by Jet (I think, again). Their logic, planes are 'goods'.

 

[ajuravi007]

NEW DELHI: Direct-to-home (DTH) operators have urged the government to rationalise the taxation structure on DTH service. In a letter to the Information & Broadcasting ministry, Essel Group’s Dish TV has said that even though DTH is considered to be a nascent segment, the levy of taxes by various government departments works out to be about 50%. The DTH operator has asked the government to categorise DTH players as service providers and thus entertainment tax should not be applicable on the sector. At present, the DTH services are subject to multiple taxation which include a license fee of 10% on gross revenue to the I & B ministry. Then there is a 12.3 % service tax charged on the subscription fee revenue earned by the DTH service provider. In addition, entertainment tax in the range of 20-30% is collected by different states on subscription revenue earned by the service provider. Also, there is about 12.5% sales tax levied on the purchase of hardware by the consumer. “The cumulative impact of all these taxes on DTH service revenue is 47.5% apart from 12.5% on the hardware,” the letter pointed out. Dish TV managing director, Jawahar Goel said, “DTH has been categorised as service and any tax on services falls within the domain of Union government. We have already been charged a 12.36% service tax. In addition to the service tax, states are charging entertainment tax which has led to the double taxation. This needs to be corrected.” Earlier, Tata Sky also said that there is a need to rationalise the tax structure on the operators. It’s CMD Vikram Kaushik had pointed out that the high level of taxes on revenues and on the set top box is “punitive”. The industry players believe that high taxes would lead to the segmentation of DTH as a premium service and not a mass-market service. According to a recent study released by the E & Y and Assocham, DTH is likely to drive the digitisation wave in the Indian entertainment industry with about 28% of the 110-million television households expected to migrate to DTH. According to the E & Y estimate, the subscriber base of DTH is likely to touch 19 million from the current 4-5 million subscribers which include DD Direct free service.

 

[amish]

they cried again today?!! they had cried 2-3 days back too!