MUMBAI: The big four of Indian cable TV - DEN Networks, Hathway Cable and Datacom, InCable and Siti Cable - heaved a sigh of relief as 21 January ended. The reason: the Delhi High Court - which was hearing their appeal seeking to restrain the state government's entertainment tax authorities from taking any coercive action against them for not paying entertainment tax - gave them relief, if at least for some time. The HC passed an interim order, forbidding the tax folks from taking any steps against three of the MSOs - Den, Hathway and InCable.
The cases that were heard in one day saw the appeals of DEN and Hathway being joined together while InCable and Siti Cable presented its case separately. With the order coming into effect, MSOs have been relieved of the duty of collecting entertainment tax from the LCOs and submitting it to the government till the judgment on the case is passed. The next hearing will be on 13 March.
The respondent (the entertainment tax collection authorities) have been given four weeks to file its reply to the case. In the meanwhile, its hands are tied. However, what was not clear at the time of writing whether the onus is back on the LCOs to pay the tax to the government.
Although the MSOs are receiving the tax from LCOs, they claim they aren’t getting the full amount. Hence, the balance amount normally has to be coughed up by the MSO whether it is paid the same or not by the LCO. This is pretty unfair, they have stated.
The MSOs approached the Delhi HC as the inexplicable pressure was being thrust on them to cough up taxes.