MUMBAI Punjab minister Navjot Singh Sidhu intends to bring an ordinance for auditing the tax the previous government collected from cable operators. Putting the chief minister Capt Amarinder Singh in a fix, Sidhu has asked him to decide on recovering the ‘tax evaded’ by the MSO -- Fastway Cable Network.

The Punjab Government, he said, was committed to break the monopoly situation and to have a level playing field in cable TV industry.

In the Indian states where there is competition among MSOs, Sidhu said, rates being charged from LCOs (local cable operators) are Rs 75 in Rajasthan, Rs 60 in UP, and a whopping Rs 130 in Punjab. It was being done without any legal agreement and without raising any invoices, whereby LCOs had no option but deposit the same -- which is in contravention of the law of retransmission of cable TV signals. By creating the monopoly, Sidhu said, MSOs have an unequal bargaining power with the broadcasters but extracting huge carriage/placement revenue from the broadcasters.

Sidhu said that he would procure a GPR (ground penetrating radar) to assess where cabled had been laid and whether the operator had paid due taxes. Since the subject related to excise and taxation is under the CM, he said, the matter would have to be taken to Singh and the cabinet.

In 1995, Sidhu said, the entertainment tax in Punjab was Rs 50 per television set. But, the Badal government amended the provisions to keep Fastway out of tax net and imposed a tiny tax of Rs 15,000 per annum. A Fastway release later stated that the Supreme Court lawyer Vineet Bhagat (Sidhu's advisor) was defeated by Fastway in several cases, and hence he had twisted the facts and presented figures to show the MSO in a poor light.

Calculating the impact of the loss to the state exchequer by taking into account a conservative figure of 40 lakh Fastway connections (as stated in 2012 Competition Commission of India report, it would come to (40 lakh x 50 x 12 x 6) Rs 14.4 billion, the minister alleged. Sidhu said the actual figure could go up to Rs 200 billion. Despite having over 80 lakh connections today, Sidhu said, Fastway had grossly under-declared its connections at around 24 lakh to TRAI, continuing to short-change the regulator and the government.

Refuting, Fastway CEO Peeush Mahajan said his company had no monopoly as Godfather Cable, Hinduja and MC Transmissions were operating in the state. Punjab had six DTH companies as well, he said.  Fastway, he said, had a tamper-proof system and it has been audited by broadcasters and the central government agency BECL (Broadcasting Engineering Corporation of India Limited).

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