Reduction of Cenvat: Impact on DTH
Dec 08, 2008
Dishtv, India’s largest direct-to-home service and part of the biggest media conglomerate, Zee Group today issued a press statement on reduction of Cenvat from 14% to 10%.
Commenting on the reduction of Cenvat, Mr. Jawahar Goel, Managing Director, Dishtv said, “We welcome the government's decision to reduce CENVAT from 14 per cent to 10 per cent as it will help contain the spiraling cost of the Set Top Box, especially for the DTH industry. This will have an impact on the capital expansion plans of the sector and will improve the bottom lines”.
“DTH players are reeling under intense pressure from multiple taxes by the Centre and the States, the tax element of DTH companies goes up as high as 40% and includes service tax, entertainment tax, VAT, license fee where as no other services are burdened with these many taxes. The subscribers are taxed entertainment tax on account of news content, that they are watching in the comfort of their home. This needs to be corrected. Further rationalization of taxes can help pass on benefits to consumers”. Jawahar Goel added.
At present, the DTH services are subject to multiple taxation which includes a license fee of 10% on gross revenue to I & B ministry. Then there is a 12.36% service tax charged on the subscription fee revenue earned by the DTH service provider. In addition, entertainment tax in the range of 10-20% is collected by different states on subscription revenue earned by the service provider. Also, there is about 12.5% VAT levied on the purchase of hardware by the consumer.
Reduction of Cenvat: Impact on DTH
Dec 08, 2008
Dishtv, India’s largest direct-to-home service and part of the biggest media conglomerate, Zee Group today issued a press statement on reduction of Cenvat from 14% to 10%.
Commenting on the reduction of Cenvat, Mr. Jawahar Goel, Managing Director, Dishtv said, “We welcome the government's decision to reduce CENVAT from 14 per cent to 10 per cent as it will help contain the spiraling cost of the Set Top Box, especially for the DTH industry. This will have an impact on the capital expansion plans of the sector and will improve the bottom lines”.
“DTH players are reeling under intense pressure from multiple taxes by the Centre and the States, the tax element of DTH companies goes up as high as 40% and includes service tax, entertainment tax, VAT, license fee where as no other services are burdened with these many taxes. The subscribers are taxed entertainment tax on account of news content, that they are watching in the comfort of their home. This needs to be corrected. Further rationalization of taxes can help pass on benefits to consumers”. Jawahar Goel added.
At present, the DTH services are subject to multiple taxation which includes a license fee of 10% on gross revenue to I & B ministry. Then there is a 12.36% service tax charged on the subscription fee revenue earned by the DTH service provider. In addition, entertainment tax in the range of 10-20% is collected by different states on subscription revenue earned by the service provider. Also, there is about 12.5% VAT levied on the purchase of hardware by the consumer.
Reduction of Cenvat: Impact on DTH
