Cable TV

GST: Both good and bad for the Indian cable TV sector

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MUMBAI: India’s most ambitious indirect tax reform, the Goods and Service Tax (GST) got the green flag from the Lok Sabah on 8 August.

While, taxation rates under the GST regime are yet to be finalised, an indicative figure of 18 per cent is being talked of in various circles.

Indiantelevision.com has already postulated that DTH companies like Dish TV could be beneficiaries when GST goes live. Broadcasters, however, could be slapped on their wrists as GST is likely to result in their tax payment going up.

However, cable TV distribution sector is going to benefit like its country cousin – the DTH segment. Estimates are that multisystem operators could end up saving around five to 10 per cent in taxes in many Indian states. However, in some the tax payouts could likely go up courtesy GST.

MSOs operating in states like Punjab (with up to Rs 15000 annual entertainment tax), and Gujarat (Rs 6 per cable TV sub per month), Harayana (no tax), Kerala (Rs 5), Orissa (Rs 3) are going to be impacted negatively with their tax bill climbing up once GST becomes applicable. Other states like Maharashtra (Rs 45 per month subscriber), Jharkhand with Rs 30-50 per month per subscriber, Rs 20 in Delhi, Bihar Rs 15 per month per subscriber, will see a lightening of their tax burden.

Says a cable TV industry observer: “Cable operators normally maintain three sets of books. One for the tax folks, one for the content providers, and one which has the real facts about their business. Many of them are not tax payers at all. Under the new regime, they will have to clean up their acts, get their registration done, get their subscriber information all in order. And then pay their GST. That’s even if their margins keep coming under pressure on account of this.”

Keep watching this space for further updates!

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