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Cable digitisation to increase tax collection: Economic Survey

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MUMBAI: The Economic Survey for 2013-14 that was tabled by the Finance Minister Arun Jaitley shows that both the centre and the state governments will benefit from the digitisation of the cable TV industry in India because of the increase in tax collection from it.

Jaitley in Parliament said, “Preliminary data from the state governments show that there is already two to three fold increase in entertainment tax collections.” The transparency in the subscriber base is set to add to the manifold increase in tax collection.

Due to digitisation, opportunities are being created for the domestic manufacturers to delve into more set top box (STB) production. It stated that over three crore STBs have already been installed in the eight metros and 36 cities of the phase I and II of digitisation. The deadline for complete digitisation (phase III and IV) has been set to 31 December 2014.

India has nearly 16 crore TV households with nearly 800 channels. Also there are 88 teleports. However, the benefits of digitisation are yet to kick in even in the phase I and phase II markets with only a few cities being billed as per the rules. Uneven and high entertainment tax is an issue that all the stakeholders including DTH, MSOs and broadcasters are standing up to and urging the government to look into and provide them relief. DTH operators are double taxed as they also have to pay a service tax apart from the entertainment tax.

While DTH operators are adding 10 lakh customers each year, the government has also allowed two more operators to provide services through headend-in-the-sky (HITS) system. Effects of digitisation are already visible on film exhibition where 95 of the big screens are now digitised and the sector is ‘poised for buoyant growth in the long run.’

The survey also stated that the media and entertainment industry has had tremendous growth and according to a FICCI-KPMG report, it is expected to touch Rs 1,78,600 crore by 2018. However, piracy remains a big challenge for the film industry and the government has approved an anti-piracy plan to combat it through legal methods.

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