Govt plans to cut levy on DTH, to bring cable TV under tax ambit

THE DECISION TO CUT TAX ON DTH WILL COST THE STATE AT LEAST ₹230 CRORE

The local bodies department of Punjab has proposed a drastic cut in entertainment tax on consumers using direct to home (DTH) television signal services, from ₹60 to ₹5 per connection per month. And, to it also plans to impose tax now on traditional cable TV operators, at ₹5 per connection for the master player, or multi-system operator (MSO), and Rs 2 per connection for the local cable operator (LCO) who takes the connections to consumers.

The decision to cut tax on DTH will cost the state a cut of at least ₹230 crore in revenue as, against the current earning of ₹300 crore from the entertainment tax, that after implementation of the proposed move could fall to ₹70 crore.

It must be underlined that cable operations, which are currently not taxed at all, are controlled by Fastway Transmissions — a firm allegedly patronised by Shiromani Akali Dal’s Badals — that has hundreds of LCOs and, further, 80 lakh to 1 crore connections. DTH services have 30,000 connections, the department says.

The proposal awaits clearance from the legal remembrancer, to whom the matter was referred on Tuesday. The issue would also come up for discussion in the cabinet meeting on Wednesday, said officials in the department.

Local bodies minister Navjot Singh Sidhu, who has been harping against alleged monopoly by Fastway, told HT on Tuesday: “I want to give a level playing field to the all players in the business, and of course the consumers. Why should the consumers hooked to DTH pay more, and those to the local cable operators less?” He said he hopes the proposal is implemented in October.

Currently, DTH providers pass on the entertainment tax to the consumer. It is to be seen how the state government makes sure that DTH service providers pass on the benefit of the tax cut. While earlier there was a reported move by the department to increase the entertainment tax, Sidhu said, “Our government doesn’t want to tax the people of the state.”