Rationalise excise duty, Vat on TV, STBs: Planning Commission


NEW DELHI: Acknowledging that the major hurdle in digitization presently is the absence of digital receiver sets and the fact that about 45 per cent TV sets are Black and White, a sub-group of the Planning Commission has recommended rationalization of the total taxation level to 12 per cent.

The sub-group on 'Going Digital' set up by the Planning Commission and headed by Rajeeva Ratna Shah, member secretary in the Planning Commission and a former CEO of Prasar Bharati, said this will mean the excise duty on digital TV set, set top boxes (STBs) and its inputs be rationalized to 8 per cent and there should be a state VAT of 4 per cent. This will give impetus to the indigenous STB industry, which would generate economic activity and employment in the country.


The sub-group noted that STBs and the digital Conditional Access System (Cas) act as a catalyst for implementation of digitization. The Consumer Electronics and TV Manufacturing Association (Cetma) has indicated that the cost increase in case of a TV set, capable of receiving digital terrestrial signal in addition to analogue signal would be about Rs 1000 from the existing prices. For the existing analogue TV sets, which are expected to be around 120 million by year 2010, the consumers would need to have Digital Terrestrial Transmission STB to receive the signals. The cost of STB is presently about Rs 2250 and is decreasing every year by 7 to 8 per cent. 

The industry would require a lead time of six months to meet the demand for the digital TV sets and radio receivers. Similarly, the industry would be in a position to provide STBs in about 16 to 20 weeks from the time the government decides to change over to digital broadcasting.


"But for successful rollout, the government needs to firm up the transition path and announce timelines so that all the stake holders could put their acts together and make the transition as smooth and successful as possible. The success of DTT depends upon the availability of requisite consumer end equipment and introduction of STB coupled with Cas."

The sub-group added that India was a price sensitive market and one solution or product fits all cases is not commensurate with consumer thinking. Hence there may be need to introduce various models of STBs (having digital to analogue converter with addressability of channels with Cas to high-end models) with increasing value added features to meet the requirements of the consumers. The requisite standards need to be put in place for this. 

Out of 61 million households cable connections all over India , 35 per cent are in rural areas. This service is easily available and affordable in the rural areas. This industry is geared up to meet the challenge of digital broadcasting, the sub-group noted. 

At present, the signals from uplink station to satellite and from satellite to cable TV head-end are already digital. The signal from cable TV head-end to subscriber is both in digital and analog format. Most of the multi-service operators (MSOs) in the metros and big cities have already gone digital. Thus, only 7000 head-ends required to go digital.

Furthermore, all franchisees are not affected by digitization as they only pass the signal (analog/digital) received from the head-end to the subscribers and do not process the signal. Digitization of subscribers end depends on introduction of digital TV in the market at affordable prices and immediate digitalization of cable TV head-end. 

To further galvanize the rollout, all the content producers - Prasar Bharati as well as private operators - should provide agreed and identified channels in the digital/HDTV format to MSO/cable operators under the "Must Carry" clause. 

Going digital encompasses digital broadcasting, telecom as well as other technologies for access and backbone networks which deploy digital systems. While some of the frequency bands used for broadcasting have exclusive allocations for 'broadcasting', most of the bands are shared with other services. 

For example, the 800/ 900 MHz bands used for cellular services - GSM & CDMA, etc. are available for broadcasting also. The satellite based TV broadcasting is mostly in the frequency bands, which are shared with microwave systems. Hence, while evolving/ modifying the NFAP (National Frequency Allocation Plan), the relative national priorities of various spectrum based services have to be taken into account.

Normally digital transmissions require larger bandwidth. However, with modern compression techniques, which are improving continuously, it is now possible to accommodate multiple channels in the RF bandwidth of a single existing (analogue) channel. Hence, on complete transition to digital systems in broadcasting, the spectrum requirements should reduce or alternatively, it would be possible to transmit larger number of channels in the bandwidth occupied by existing channels. 

During the transition phase, existing analogue and new digital systems would need to be broadcast together, requiring larger spectrum bandwidth. The requirements can be assessed once the number of channels for simultaneous transmission is worked out. With digital broadcasting, it is possible to include data, Internet, etc. within the broadcasting channels. 

During the migration from Analogue to Digital Radio, new frequency assignments have to be identified to facilitate smooth migration and for some time both the existing analogue transmissions as well as new digital transmissions would continue. Hence, there will be spectrum constraint during this transition phase. Also, the spectrum for digital migration may need to be identified for both Prasar Bharati as well as Private FM Broadcasters. 

The sub-group, comprising 17 members, was set up by the Committee on Information, Communication and Entertainment (ICE) that has been examining the larger issue of convergence and advent of modern technology. Members include the secretaries in Information and Broadcasting and Department of Telecommunications, the Prasar Bharati CEO, the presidents of Cetma, Mait, Nasscom, and ISP Association of India, co-chairman of the Ficci entertainment committee Kunal Dasgupta, chairman of the CII entertainment committee, chairman of the Film & Television Producers Guild of India, president of the Cable TV Operators Association, Rajiv Mehrotra who is the managing trustee of the Public Service Broadcasting Trust, Virat Bhatia from AT&T Communications Services, Zee Telefilms President Abhijit Saxena, Sameer Rao who is vice-president in charge of strategy, planning & regulatory in Star India, and a representative of the Prime Minister's Office.

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