Politics over TV: Sidhu’s Fastway war hangs by cable connections

Law was toothless; the previous govt also made it impotent. We will give it bite. Once the number of TV connections is out, asi ohnu tang dawange (we will nail Fastway)! NAVJOT SIDHU, minister The perconnection tax will not hit our business as we are seeing growth of 40,000 to 50,000 boxes a year in Punjab owing to our services, price and infrastructure

GURDEEP SINGH, Fastway MD

CHANDIGARH : It is a show playing prime time in Punjab politics. But, as it goes on, cricketerturned-TV star-cum-politician Navjot Sidhu may have realised it is easier to hit a six, or laugh on TV, than tackle the business of a cable TV czar.

The local bodies minister has been seeking a vigilance probe into alleged evasion of “crores of state and central taxes” by Fastway Transmissions, a multi-system operator (MSO) of cable connections, who he says was patronised by the previous SAD-BJP government of the Badals. But it is proving to be a difficult catch.

CM Capt Amarinder Singh has taken the line of “no vendetta politics, no censorship” in his second stint as CM. He has also put the onus of proof on Sidhu.

In the last cabinet meeting on October 16, Sidhu was able to push through a proposal to end a differential tax regime that favoured cable over direct-tohome (DTH) players. The Punjab Entertainments and Amusements Taxes (Levy and Collection by Local Bodies) Bill 2017, when passed by the assembly, will bring MSOs and DTH operators on a par; both will have to pay ~5 a connection. The local cable operator (LCO) too will pay ~2 a connection, in rural areas too.

“This will provide a level-playing field to DTH, and end the monopoly of Fastway,” Sidhu says, adding, “A local operator pays ~130 to Fastway while that charge is ~70 in states such as UP and Rajasthan.” Fastway says cable channels are cheaper in states such as UP and Rajasthan as people do not subscribe to English or sports networks.

While the ~5 tax on DTH — down from 10% of subscription fee — will hit government revenue by a few crores, it might miss the target, Fastway, which says its business will keep growing. Its managing director Gurdeep Singh says, “It cannot be called a level-playing field. There is no middle player in DTH and the lower tax will benefit the companies. Despite having local operators, our packages cost a third of DTH. Per-connection tax will not hit our business as we are seeing growth of 40,000 to 50,000 boxes a year in Punjab owing to our services, price and infrastructure.”

Sidhu, whose earlier proposal of ~50 tax per cable connection did not get the CM’s nod, is hoping the ~5 tax will reveal the exact number of connections. “There are even four TVs in many homes. Number of DTH connections in the state stands at 16 lakh. Those under Fastway are anywhere between 80 lakh to 1 crore. But the company shows far fewer connections on its books,” Sidhu says. Fastway puts its figure at 24.5 lakh connections in Punjab. Even Sidhu’s own department puts the number “anywhere between 23 lakh and 64 lakh”. “It would be safe to estimate that there are 44 lakh cable connections,” the note prepared by his department for the cabinet said.

Sidhu’s department is the new authority for entertainment tax under GST regime. Earlier, the power was with excise and taxation department, which is under the CM now and was with the then deputy CM Sukhbir Badal in the previous regime. GST has also reduced tax on cable and DTH from 25% to 18%.

While the Punjab Entertainment Duty Act, 1955, allowed up to ~75 levy per cable connection, the previous Parkash Singh Badal government had, from April 1, 2010, imposed 10% tax on DTH players on subscription fee.

But, for cable operators, it was ~15,000 per year at their place of registration, irrespective of number of connections, allowing both MSOs and LCOs to escape the perconnection tax. The Centre levied 15% service tax on monthly collections on all connections in which too Sidhu alleges evasion by Fastway by “under-reporting” subscriptions.

Sidhu questions why Punjab had foregone a major source of tax from cable when states such as UP charge 25% on gross collections. “The law was toothless; the previous government also made it impotent. We will give it a bite. Once the number of TV connections is out, asi ohnu taang dawange (we will nail Fastway),” he signs off with signature bluster.