Television

Foreign TV companies contribute more to govt tax kitty

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NEW DELHI: If paying up of tax is a yardstick, then it seems foreign satellite channels are doing better than their Indian counterparts.

Foreign television channel companies have, on an average, paid higher amount of income tax than Indian channels for the financial year 2000-2001, according to India's information and broadcasting minister Sushma Swaraj who was replying to a question on the issue in Lok Sabha (the Lower House of Indian Parliament) yesterday.

However, the minister did not divulge the amount of tax paid by individual foreign broadcasters in India during the year she referred to. In 2001, the Indian government had said that foreign broadcasters like Star, Sony, Discovery and MTV, Turner International India operating in India will have to pay taxes (as per the Income Tax Act) here as per their assessed income only if they are making profits. 

Before that, a presumptive method for taxation of foreign broadcasters was adopted in India. The change meant assessing officers will compute the profit and the foreign broadcasting companies will pay tax accordingly. 

Till this budgetary announcement was made, foreign broadcasters' Indian arm paid 48 per cent tax on 10 per cent of their total receipts in India (earnings from air time selling) which was deemed as profit. This was done under circular No. 742 issued by the government.

"If a company is not making profit, then it will not have to pay tax," a government official had explained in 2001.

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