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Ahead of deadline, 41 TV channels apply for downlinking in India

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NEW DELHI: Talk about cutting it close. With just a day remaining (10 May 5:00 pm to be exact) for the deadline to adhere to downlink norms, 41 television channels have applied for registration in India.

"Around 40 channels have submitted their applications for registration in India," the Press Trust of India quoted an an official in the Information and Broadcasting Ministry as saying.
PTI quoted the I&B official as saying that the channels seeking registration include the Star Group, Sony, Zee, Discovery, Anil Planet, Cartoon Network, CNN, Pogo, MTV, Channel V, Toon Disney, Hallmark, HBO, Ten Sports, Channel News Asia and Times Now

Those yet to send in their applications include Fashion TV, ESPN-Star Sports and BBC, the report adds.

Speaking to Indiantelevision.com on the matter yesterday, a BBC spokesperson had said, ''BBC World is aware of the timetable set out by the Indian government for completion of all formalities of registration under the new down linking guidelines issued on 11 November 2005. In compliance with the timetable, BBC World has prepared its application and will submit the same within the 10 May deadline set."

The government, meanwhile, clarified that all those channels that have applied for landing rights on or before 11 May 2006 could continue to be carried on cable networks till the channels’ are denied the right.

“A cable operator may continue to carry or include in his cable service any television broadcast or channel, which has made an application for registration to the central government on or before the date of commencement of the notification, for a period of six months from the date of such commencement or till such registration has been granted or refused, whichever is earlier,” a government statement posted on the site of I&B
ministry said.

The statement also said that amendments to the Cable Television Network Rules 1994 and DTH guidelines will be notified separately and issued on 11 May 2006.

Those channels that had been granted permission for uplinking from India before 2 December 2005 shall be treated as “registered” television channels and can be carried or included in the cable service. The full list is available under Codes & Guidelines section at mib.nic.in.

Yesterday, a senior government official had admitted to Indiantelevision.com that the number of applicants seeking landing rights in the country is still "very low" compared to doubts and queries being raised. "This is surprising
considering the deadline is 10 May," the official added.

The government issued an ultimatum last week that those channels not fulfilling all the downlink criteria by 10 May 2006 would be denied landing rights.

The I&B ministry also posted on its website communications sent to the Indian Broadcasting Foundation, Star Group, Time Warner and a lawyer. The missive made it clear that the deadline of 10 May stays.

The lobbying against the downlink norms as a whole and partly is understandable. The moment a television company sets up a permanent establishment (PE) in India, as per downlink norms, its tax liabilities in India would go up drastically. Rather, more the revenues collected in India, higher would be the tax component.

Recently, Economic Times reiterated this fact in a report also. "After unveiling the downlinking policy for satellite television channels, the government is set to re-examine the tax treatment of revenues earned by foreign TV channels (FTCs). These companies earn advertising revenues from ad agencies, sponsors, and subscription revenues from cable operators.

"The task force on emerging issues in non-resident taxation, constituted by the finance ministry, is understood to have made an attempt to bring greater clarity and certainty in the tax treatment of FTCs. This, in turn, may enable India to get a larger share of the pie. Going by the recommendations,
FTCs will be liable to pay tax in India if they have a permanent
establishment (PE) here. Alternatively, a dependent agent who has the authority to conclude contracts, also constitutes a PE," the newspaper said.

Before 2001, foreign TV channels used to pay taxes on a presumptive basis on their advertisement revenues earned in India, which ranged between 35-40 per cent.

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