Grant 3-year tax holiday for digital headend, STBs: CII

NEW DELHI: The cable television sector should be given the status of ‘information infrastructure’ for smoother transition from analogue to digital technology and foreign direct investment in the cable TV distribution sector should be increased from 49 per cent to 74 per cent, the Confederation of Indian Industry has said.

In its demands relating to cable TV digitisation, CII said giving the new status to the sector would bring the cable TV sector on parity with other infrastructure sectors in the way taxes are levied and bank credit dispersed. It noted that the Telecom Regulatory Authority of India (Trai) had already accepted the need to raise the FDI.

India‘s cable TV infrastructure is set for complete digitisation by the end of December 2014 and the four Indian metros (Delhi, Mumbai, Chennai, and Kolkata) by 30 June this year.

The industry body said an estimated Rs 250 billion has to be invested by the cable distribution sector to digitise 90 million cable homes in the next three years. There are over 40 million direct-to-home TV homes in the country.

CII strongly recommends certain measures to be undertaken by the government to enable the transition and said these had been accepted by Trai.

All service providers who set up a digital addressable distribution system before the sunset date to be notified in stages over a three-year period should be treated at par with Telecom Service Providers and be eligible for income tax holiday from 1 April 2011 to 31 March 2019.

The basic customs duty on digital head-end and set-top boxes should be reduced to zero for three years to give boost to digital conversion.

The double charge of service tax and entertainment tax should be subsumed in GST in due course.

It noted that the cable TV industry was nervous as over 10 million cable TV homes in the four metros have to shift to the digital medium by buying a set-top-box in the next 135 days and key decisions are pending before the government.

“It is very critical to extend financial incentives and tax holidays to the cable TV distribution and DTH sector,’’ said CII director general Chandrajit Banerjee.

"There has been a consensus for digitisation and everyone in the value chain – the government, broadcaster, multi system operator, local cable operator and consumer - will benefit from this. It is a big challenge and if executed properly it will transform the broadcast sector, bring transparency and give freedom to consumers."

Maintaining that digitisation will boost broadband penetration in the country, CII said that government should accelerate pending decisions to stop ‘murmurs in the industry’ for extension of timelines for cable TV digitisation. CII feels that if India misses digitisation execution now, it may not be possible to do this for a long time.

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