GST Bill, DTH and broadcasting

MUMBAI: When the The Constitution (122nd Amendment) Bill, 2014 was passed in the Rajya Sabha late Wednesday night, it heralded the rollout of the goods and service tax era in India. In the making for nearly 16 years it is estimated to inject an additional one to two points in growth to the world’s fastest growing economy.

GST, as envisaged by the government, is one indirect tax for the whole nation, which will make India one unified common market. It will subsume central excise duty, additional excise duty, service tax, additional customs duty commonly known as countervailing duty, and special additional duty of customs at the Central level. GST will also subsume state value added tax/sales tax, entertainment tax, central sales tax, octroi and entry tax, and purchase tax at the state level.

Last year when finance minister Arun Jaitley had tabled the Bill then for debate, indiantelevision.com had spoken to industry stalwarts. Videocon D2H CEO Anil Khera had at that stage opined: “GST is a welcome move. It will help the DTH sector to prosper. DTH is the biggest victim of multiple taxation policy and GST will simplify that. The industry needs a uniform taxation system and the sooner it comes the better it is.”

Speaking to CNBC TV18 on 2 August Dish TV chairman and managing director Jawahar Goel had said that the passage of the GST amendments would benefit his company to the tune of three to four per cent initially and this would likely improve to four to five per cent going forward.

“Currently our outgo on indirect taxes is roughly around 23 percent and then for tax administration also, our expenditure is almost 1-1.5 percent, for managing our logistics in each of the states. The savings should go directly to our bottomline,” he had shared with the business news channel.

Broadcasters would likely be impacted too as the indirect taxes that they pay currently are around 14-15 per cent. Observers expected the outgo for them could rise to about 18-20 per cent the introduction of GST.

(Because this is a developing story, more facts may emerge as we go along. Hence it will be updated with new viewpoints then.)

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