DTH

Industry welcomes reduction of CENVAT on STBs

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MUMBAI: The Union Finance Minister P. Chidambaram in his Vote on Account speech in Parliament today announced a proposed reduction of excise duty from 12 per cent to 10 per cent on all goods falling under chapter 84 and 85 of the schedule to the Central Excise Tariff Act for the period up to 30 June, 2014. With effect from today, CENVAT on Consumer Premises Equipment (CPE) has been reduced.

The reduction in excise duty would be a great relief even to the DTH and TV industry. In fact, Dish TV welcomed the announcement as they hope this would give the DTH sector in India some respite from the levy of multiple taxes.

The Direct to Home operator Dish TV which had been requesting the government to waive 12.36 per cent service tax till the rollout of GST and rationalise other taxes imposed on the DTH industry applauded the duty reduction move as its Set Top Boxes and other Consumer Premises Equipment fall under Chapter 85 of the Schedule.

“This is a small relief. But any relief is welcome,” says Dish TV CEO RC Venkateish, further adding, “We still need to evaluate the reduction to be able to decide what it translates for the consumer and if they would see any reduction of cost for our services.” 

Dish TV will evaluate the reduction in the next couple of days. “It is a highly taxed industry with dual taxation of entertainment and service tax. Major relief will be felt only if these two are reduced or one of them is eliminated,” says Venkatesh.

“This reduction means that we will save some Rs 50-60 per Set Top Box (STB). So for a volume of say 2-2.5 million STB, we will save close to Rs 10-15 crore,” he informs.

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