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DTH & cable ops miffed as AAP hikes entertainment tax in Delhi
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Breaking News :  DTH & cable ops miffed as AAP hikes entertainment tax in Delhi
by the
on cable TV and direct to home (DTH)
in the national capital has gone up
from the current Rs 20 to Rs 40, that
for cinema halls has been hiked by
20-40 per cent. This, even as
Maharashtra based cable operators,
paying a hefty sum of Rs 45 as
entertainment tax, are still fighting
a case in the Bombay High Court for
slashing the taxes, with little
According to Delhi based cable
operators, while there aren't any
issues per se with increasing the
entertainment tax, their grouse is
that the government should have
devised a way of collection from
consumers before increasing the ET.
As for now, it is the local cable
operator who collects the ET from
consumers and then gives it to the
multi system operator (MSO). The
system sees a number of leakages and
blame game. While LCOs lament that
the customer does not pay ET, MSOs
believe that the LCO fail to pass on
the collected ET to them. Since the
onus of finally submitting the ET
collection to the government is on the
MSO, not surprisingly they are held
guilty more often than not.
While Delhi fell in phase I of DAS,
where interconnect agreement should
have been signed and billing started,
thus protecting leakages, the same
has yet not been achieved. Thus,
increasing the ET by Rs 20 seems no
less than a burden to both LCOs and
"The government can increase the
entertainment tax, but then what are
the measures it has put in place to be
able to facilitate collection," says
Cable Operators Federation of India
(COFI) president Roop Sharma.
Sharma believes that the government
should give incentives to cable
operators for collecting
entertainment tax from consumers.
“The LCOs are the biggest sufferers
in the whole process as they face the
task of extracting this additional
amount from their customers,” she
According to a Delhi based MSO, hiking
entertainment tax is an unwelcome
move. “With the earlier tax system,
the exact amount was not being
collected and this resulted in the MSOs
getting penalized. The LCOs will not
be able to collect the extra money
from the ground, which will mean that
the MSOs will have to pay the
remaining from their own pocket,”
the MSO tells on
condition of anonymity.
The MSO is also of the opinion that
while digitization was aimed at
bringing in transparency, which
ensured lesser leakages, hiking taxes
and thus increasing the cable bill was
DTH Operators Association of India
president and Videocon d2h CEO Anil
Khera said, “The recent announcement
of doubling of entertainment tax on
cable TV and DTH services made by the
Aam Admi Party government seems
unfair and illogical. DTH as a platform
is considered as critical to citizen’s
right to information, news, education
and entertainment. The sector is
already saddled with high tax, where
33 per cent of revenues are taxed
between the Centre and State. DTH
operators that comprises Tata Sky,
Dish TV, Airtel Digital TV, Videocon
d2h, Sun Direct and Reliance Big TV,
will have no choice but to hike their
tariffs in Delhi to accommodate this
hike in entertainment tax and the
load will finally fall on the customer.
By dropping electricity prices on the
one hand and increasing
entertainment tax on DTH on the
other, does not seem like a move in
favour of the aam aadmi! Is this how
we plan to achieve a balance budget
and reduce fiscal deficit?”
On the other hand, Sharma informs
that while the hike in entertainment
tax is applicable for private DTH
players, DD Freedish has been kept
away from it. “Surprisingly the DD
Freedish service is not taxed, but the
same channels forced upon the cable
TV networks will demand a tax. It
appears there is no co-ordination
between the central and Delhi
government and in the bargain
the aam aadmi has to suffer,” she
MSOs and DTH players will now have to
come up with a campaign to inform
consumers of the hike in
entertainment tax, so that it is
easier to collect from the ground.
This also could be the trigger for
going prepaid, something that Mumbai
based MSO IMCL has started, where
the customers pays for the channels
they want to watch in advance.
Defaulters, if any, face disconnection
of set top boxes. The mechanism can
at least help in collection and not
make the LCOs or MSOs fall in the
defaulter category. However, one
thing remains unchanged, which is
that the consumer will surely have to
have deep pockets for their
entertainment needs and demands
going forward.
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