| NEW
DELHI: Information and Broadcasting Minister Ambika Soni has urged Finance Minister
Pranab Mukherjee Mukherjee to bring down the special additional duty (SAD) and
countervailing duty (CVD) on digital set-top boxes to zero per cent for at least
five years. The current SAD and CVD on set-top boxes are 4 per cent and 8 per
cent respectively. There
will be a nearly seven-fold increase in the number of DTH and digital cable subscribers,
to around 82 million by 2013-14 and a net revenue of around Rs 72 billion, if
the current duty regime is brought to zero for five years, the Ministry estimates.
In
the last two years, DTH and digital cable sector grew from around four million
subscribers to 12.5 million subscribers, and the figure is expected to cross the
80 million mark within the next five years if the duty regime is ended, according
to estimates presented at Ficci Frames. According
to the calculations made by industry experts, the reduction in CVD and SAD on
boxes may result in a one-time revenue loss of Rs 210 per box but the recurring
revenue benefit will be Rs 622 per year per STB to the government – amounting
to a recurring revenue of Rs 17.30 billion per year, with additional penetration
of the boxes in DTH and digital cable services. Some
stakeholders told indiantelevision.com that the sector wants broadcasting to be
categorized as an infrastructure service so that the benefits and incentives applicable
for the infrastructure sector could be extended to it. Noting
that the Government is introducing Goods and Service Tax (GST) regime from April
2010, it has also been suggested that the service tax, entertainment tax and VAT
should be subsumed in GST and only a single/unified GST rate be notified for direct-to-home
(DTH), FM Radio operators, cable services, and for similar content distribution
services. Soni
recently said she had sought reduction in the fringe benefit tax (FBT) from 20
per cent to 5 per cent for media personnel working for both print and electronic
media companies. "Keeping
in mind the fact that the broadcasting sector is expected to grow at the rate
of 12% in the next four years, I requested the Finance Minister to provide parity
and rationalisation in the service tax paid by broadcasters on revenues accrued
by them from advertisements,'' Soni said after a meeting with Mukherjee. Sources
said that the broadcasting sector is also seeking relief in Fringe Benefit Tax
in the matter of booking of hotels, travel and food even when traveling for professional
work. The sector wants a reduction in FBT for media personnel from 20 per cent
to 5 per cent. The
basic custom duty for digital head-end equipments should be brought to zero per
cent. This presently varies from 7.5 to 10 per cent. The
sector wants tax holiday for five years under Section 80 – 1A of the Income
Tax Act for those sub-sectors who are undertaking digitalization and tax at not
more than 30 per cent for a further five assessment years in a block of 15 years.
Broadcasting
entities want exemption from payment of service tax on revenue accruing from advertisements
shown on electronic media, at par with the print media. A
Ficci spokesperson told indiantelevision.com that it was seeking that the gaming,
animation and the VFX (visual effects) industries be given a ten-year tax holiday
as they were emerging sectors. This should also be extended to children’s
films. Ficci
also feels that there is need to encourage local talent by providing a mandatory
provision on the networks to screen ten per cent of local programming to begin
with, ultimately taking this to 30 per cent. This was because most of the animation
and gaming at present was being imported despite local talent being available. | 
