(6 September 2005 10:00 pm)

MUMBAI / BANGALORE: Karnataka's couch potatoes can breathe easy. For now. The state's multi system operators (MSOs) have suspended their threat to black out signals against the new entertainment tax of 10 per cent levied by the Karnataka state government.

This followed a meeting this evening in the Karnataka state capital of Bangalore with finance minister PGR Sindhia who has asked the MSOs in the city to put forward a solution on the tax issue and present it before the State Commercial Taxes Department.

This decision was taken during the second round of discussions held between the minister and the MSOs at 5:30 pm today. Following this, the MSOs have suspended their strike.

"The minister has asked us to prepare a presentation detailing a solution that can avoid this double taxation. We are supposed to meet Commercial Taxes Department on 9 September. Then we will have another round of discussions with the minister on 15 September," Siti Cable regional director P Kailasam told indiantelevision.com.

In protest against the new entertainment tax of 10 per cent levied by the Karnataka state government, MSOs had disconnected the cable services on 5 September at 8 pm. They had also threatened to black out television screens throughout the entire state if the government did not withdraw the tax burden. But they suspended their strike following the first meeting with the minister at 11:30 am.

Entertainment tax is already being paid by the cable operators. By amending the Karnataka Entertainment Tax Act, the government has levied a new tax on the MSOs, which is 10 per cent of the money collected from cable operators.

The MSOs argument is that the State Commercial Taxes Department officials have been demanding the tax payment though the issue is pending before the Karnataka High Court.

The MSO's contend that they are only providing signals to the cable operators who in any case are already paying entertainment tax. Levying an additional entertainment on the MSO's amounts to double taxation, which would only make television viewing dearer for the subscribers.