STB customs duty reliefs only until 31 July

NEW DELHI: The summer special discount from the government to the cable consumers of the four metros of Delhi, Kolkata, Chennai and Mumbai: buy set-top boxes before 31 July and get up to 45 per cent discount on the computed price of the box.

"With the reduction in the customs duty levied on set-top boxes, the benefit works out to about 45 per cent keeping in mind the way duties are computed," information and broadcasting minister Ravi Shankar Prasad today told journalists after the government, under severe pressure to postpone implementation of conditional access system (CAS), announced a hefty reduction in the various duties levied on import of STBs.

The move also shows that the present government is Hell bent on implementing CAS and the State is powerful enough to bring in legislative measures overnight that would facilitate this, if it really wants to take a policy to its logical end of implementation.

A finance ministry statement related to a notification on this, dated 28 May, said today, "The (basic) customs duty on integrated receiver decoder, also known as set-top box, is being reduced from 25 to 5 per cent. Set-top boxes are also exempt from additional duty of customs (CVD or countervailing duty of 16 per cent) and special additional duty of customs (of 4%)." These concessions are available up to 31 July, 2003.

In effect, it means that up to 31 July only 5 per cent basic customs duty will be levied on import of STBs. Prasad explained that this move is meant to give a fillip to the import of STBs and, if need be, the deadline can be extended. However, he said the CAS rollout deadline of 14 July remains "unchanged".

Reacting to the development, Zee Telefilms additional vice-chairman and Siti Cable head Jawahar Goel told, "We would definitely pass on the benefits to the consumers and would come up with a restructured rent-a-box scheme for STBS for consumers."

So, how does it work? According to Goel, suppose the landing cost of a box is Rs 2,500, then additional levies on that would be 1 per cent landing duty (Rs 25), 5 per cent basic customs duty (Rs 125), plus the sales tax, which varies from state to state between 4-12 per cent. In Delhi, for example, an STB would attract a sales tax of about 8 per cent that would work out to about Rs 208. The cost of the box would thus in Delhi be approximately Rs 2,500+Rs. 25+ Rs. 125+ Rs. 208, which would total up to Rs 2,858.

Hinduja Group MSO INCableNet welcomed the government's decision and announced an "introductory scheme" starting 15 June making available digital STBs at a deposit of Rs 999 plus a daily rent of Re 1.

The Star India-backed and Rajan Raheja promoted MSO Hathway Datacom also hailed the development. Neeraj Bhatia, V-P, western region said, "Hathway has always been endeavoring to roll out conditional access in a consumer friendly manner and we are very happy that the government has responded to our long pending submission to reduce the high duties on set top boxes. This will reduce the box price substantially and we will pass the whole thing to the consumer."

Contacted by indiantelevision, Star India CEO Peter Mukerjea today said, "I think the move (duty reduction on import of STBs) is good for the industry."


Admitting that there was some political pressure, Prasad today said that the prime minister and the deputy prime minister had told him ensure that CAS has to be consumer friendly and keeping that in mind, the government has reduced the duty component on import of STBs drastically.

Wearing a yellow kurta "to beat the heat", Prasad, who only returned from Bangkok early today morning, also took on the political opponents and critics of CAS by saying a lot is being written about CAS, but many do not understand the benefits that would accrue to the consumer.

"Delhi's chief minister Sheila Dikshit has written saying that CAS implementation should be reviewed, but let me read out a para from the letter that makes it clear she is not opposed to CAS per se," Prasad said, bringing to fore all his capabilities as a lawyer, while putting forth an argument forcefully.

Throwing a challenge to Dikshit and others of her ilk opposing implementation of CAS from 14 July, Prasad said, "The Central government has done its job, I'd appreciate if the state governments (Maharashtra and Delhi are ruled by Congress governments) now do their duty on sales tax if CAS is to be made consumer friendly."

A clear indication to the state government ruled by the Congress and the non-Congress parties that they should follow suit and look at ways to reduce sales tax on STBs.

Taking a potshot at Congress' criticism of CAS being anti-consumer, Prasad quipped, "It's time we lifted it (the debate on CAS and its rollout) beyond political polemics.there is no need to make CAS a game of football."

Defending his ministry's stance, Prasad also said that his political party, BJP, is a democratic organization where everybody has a right to voice his or her concerns, but "let me assure you CAS would give the consumer the freedom of choice and bring about transparency in the industry."


Taking the opportunity to send across a message to all stakeholders of the industry, Prasad said that the government is, and would be, monitoring CAS on a daily basis.

There are various safety measures in the relevant Acts (like a cable op cannot arbitrarily choose and show free to air channels as all genres need to be represented that is a cognizable offense if flouted), Prasad said, adding, "If need be appropriate (additional) legislative measures would be taken." A clear message to all the stakeholders of the industry that they should fall in line.

Asked, if the government is doing anything to ensure that the broadcasters go in for unbundling of pay channels, Prasad said, "The ministry is monitoring (the proceedings) daily and some information on pay channels would be shared with you all."

According to him, the government is seized of the matter and steps would be taken to ensure that the consumer gets the freedom of choice and at affordable price. "It cannot be that a particular bouquet is selling at Rs 100 now and for CAS one channel is priced at Rs 90. The industry should help in serving the consumer that would also give all a market," the minister said. He concluded by sending an "appeal" to all stakeholders of the industry to realise that CAS is beneficial for the consumer and a good service would attract a good market.

Also Read:

Govt. cuts customs duties on set top boxes

STB duties: finance ministry won't budge

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