Excise duty cut on STBs bring little cheer to local manufacturers

MUMBAI: The finance ministry's decision to notify a reduction in customs duty from 25 per cent to 5 per cent on key components of a set-top box -- tuners, remote control units and RF-modulators - in addition to abolishing excise duty on set-top boxes (STBs) has upset local manufacturers. There is a feeling that locals who make these items for television and perhaps telecom equipment will be hit because imports of these components will be cheaper than local manufacture, in the absence of countervailing duty on the import.


Broadband Pacenet (India) CEO S Ravindran reacts by saying: "Considering the estimated demand of 40 million boxes, the only way the government can give a boost to the local Indian industry is if the IPR for the design of the box and CAS is held in India. Otherwise, import is cheaper and the government will only play into the hands of foreign manufacturers. The moot point is that the box and CAS are integral units - that is why STBs can be rented (avoiding sales tax) because the box is part of the plant controlled by CAS."


Experts are also critical of the fact that the ministry has not exempted the key components from excise duty. Sanjiv Narayan, president, Electronics Component Industry Association (Elcina), was quoted in a leading business daily as saying that if the components manufactured locally carry a 16 per cent excise duty but there is no excise duty on a finished STB, there is no set off for the manufacturer and the value-addition chain is broken.

HTMT group director and CTO KV Seshasayee says that the situation will not be clear until notiifcation comes through. "There is no excise duty if these items are imported - the components are not sold to customers. Presently these componenets are not made in India. ELCINA should be able to get clarification from the Ministry that if they supply these items locally, the STB manufacturer should be able to claim drawback on this, or the tuner manufacturer should be excise exempt when delivering to STB vendor. The remote control units are already made in India, and costs are comparable," he adds.

Seshasayee also adds: "These are operational matters which component manufacturers have to work out with government. We as MSOs can help in the process."

Broadband's Ravindran also feels that the government's strategy is anti-consumer. "The royalty on CAS can be calculated at $10/box and smart cards are replaced every year and cost $4. These will be continuous outflows and the subscriber will have to bear this cost. Certainly the government is not endeavouring to make it consumer friendly as other countries have done. In China, the government has made Chinacrypt as standard--so consumer gets flexibility and the government gets security. "

According to industry sources, manufacturers in China are able to supply globally because domestic policy allows them to manufacture locally for exports as well as domestic consumption.

Asked to comment on the government's latest effort to get STBs moving in the market and the reaction of local manufacturers, HTMT group director and CTO KV Seshasayee said the situation would only be clear after the government notification came through.

He however made two points. The first being that there is no excise duty if these items are imported (the components are not sold to customers).

And referring specifically to the complaints made by local manufactuerers, Seshasayee said, "Presently these componenets are not made in India. Elcina should be able to get a clarification from the ministry that if they supply these items locally, the STB manufacturer should be able to claim a drawback on this, or the tuner manufacturer should be excise exempt when delivering to STB vendor. Remote control units are already made in India, and costs are comparable."

Latest Reads
Content a 'Game of Thrones'; AT&T's control over HBO, Cartoon Network, Warner Bros faces regulatory lens

The global media landscape is resulting in a new juggernaut as an internet and cable behemoth yesterday purchased an entertainment conglomerate making the former unmatched in its size and reach to consumers through home broadband, smartphones, satellite television and a battery of movies and cable...

Television TV Channels English Entertainment
US$ 4.5 bn expected from IPL rights; SC recommends accounts scrutiny

The Supreme Court on Friday froze all financial transactions between the BCCI and state cricket associations by directing the apex body not to disburse any funds till it resolves to abide by the Justice RM Lodha panel recommendations on reforms by 3 December . The top court ordered that none of...

Television TV Channels Sports
TVS Tyres is co-presenter for Asian Champions Trophy 2016

Continuing its strong connect with sports, TVS Tyres has associated with Asian Champions Trophy 2016 by becoming the co-presenter. The Asian Champions Trophy is one of the premier hockey tournaments, a much sought after annual international competition promising some great hockey action. This...

Television TV Channels Sports
Q2-17: Zee Learn declares maiden interim dividend

The board of directors of the Essel group’s education company Zee Learn Limited (ZLL) have declared a first time ever dividend of 5 percent per equity share of Re 1 each for the quarter ended 30 September 2016 (Q2-17, current quarter).

Television TV Channels Factual & Documentary
Whether BARC action can stop unethical practices?

MUMBAI: Can businesses and industries practise their art of selling fairly although they have 'Fair Practices' training during academic courses, workshops and several ISO and other certifications? There seems to be the fear of the lawman, and not the law in India. If the traffic cop is watching,...

Television TV Channels Viewership
TV Superhighway: beIN, Yaddo, AfricaXP have joined us, says Magine CEO Ambuj Goyal

CANNES; Magine has secured partnerships with four of the industry’s most exciting sports, documentary and entertainment content providers. Partnerships with beIN, the international media group and owner of MIRAMAX; Yaddo, the new documentary streaming service headed up by former head of The BBC’s...

Television TV Channels Factual & Documentary
Colors emerges strong on strength of Naagin I & II

MUMBAI: One of the top rated shows Naagin Season 2 helped Colors reach a top-ranking position.

Television TV Channels GECs
Pakistan Broadcasters Association to oppose PEMRA Indian content ban

MUMBAI: The Pakistan Electronic Media Regulatory Authority (PEMRA) shocked both Pakistan and Indian broadcasters when it issued an order blanking out  all Indian content from Pakistan’s television channels on 19 October.

Television TV Channels GECs
Sony Pix to telecast 'Jurassic World' on 22 October

Sony Pix will take the viewers on a thrilling, adventurous journey with cloned dinosaurs in their Billion Dollar Premiere property. The channel plans to air Jurassic World on 22 October at 1 pm and 9 pm.

Television TV Channels English Entertainment

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories