Trai gives cable industry go ahead for price review

NEW DELHI: Broadcast and cable regulator Telecom Regulatory Authority of India (Trai) today clarified that the cable industry can review the prices to adjust an increase in service tax to 8 per cent and implementation of an additional tax in the form of educational cess as mandated by the Central government in its annual budgetary proposals.

In a statement issued today, Trai said than an earlier order of the organisation, under the Telecommunication (Broadcasting and Cable) Services Tariff Order 2004, was being amended to accommodate these changes, pursuant to demands from the industry.

Trai had specified as ceiling the rates at which the charges will be paid by the cable subscribers to cable operators, by the cable operators to multi-service operators and by multi service operators to broadcasters (including their authorised distribution agencies) as prevailing on 26 December, 2003.

Subsequently in July, the new government presented the country's annual budget for the year 2004-05 and introduced the Finance Bill in the Lower House of Parliament. As part of the budgetary proposals, the government had proposed to increase the service tax and levy an educational cess on cable services, as part of an overall exercise to mop up more revenue.

"Since the rates of taxes are decided by the Central and State governments, it would not be appropriate for the Authority to put a ceiling on such charges. Generally the regulated prices are exclusive of taxes and in this case also the ceiling is on the charges payable exclusive of taxes. To amply clarify the issue, the Authority has decided to amend the tariff order," the Trai statement said.

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