New Delhi: The Maharashtra government is considering levying a surcharge on entertainment tax paid by operators of direct-to-home (DTH) services such as Tata Sky Ltd and Dish TV India Ltd, the state’s chief minister Vilasrao Deshmukh said, because there is “no method to accurately measure how many TV sets are being served” by these companies.
An announcement on this will be made soon, he added.
The government’s decision comes after a 9 February meeting between Deshmukh and the Cable Operators and Distributors Association, an industry body, during which the latter complained that DTH operators are inadequately taxed and a surcharge should be levied on them.
DTH companies do not agree that there is no way to measure how many customers they serve.
“I’m surprised, DTH is already reeling under a plethora of taxes that together amount to 56% and we even suffer double taxation in some instances. DTH is a fully transparent and addressable system while it is well known that there is 80-90% underdeclaration in cable,” said Vikram Kaushik, CEO, Tata Sky.
“If anyone is misleading the government, we’ll take adequate steps to correct the misinformation,” he added.
Interestingly, the conditional access service (CAS) regime that several Indian cities have moved to was prompted by conflicts between broadcasters and cable operators with the former alleging that the latter were under-reporting the number of customers they were serving.
Much like DTH, CAS operates through set-top boxes that receive encrypted signals. In DTH, these signals are received by consumer households through a small satellite dish, while in CAS, they are received through cables.
The move comes even as DTH operators have been making representations to several Union government authorities and state governments requesting a rationalization of the tax they pay in the coming Union Budget. DTH companies claim they pay a cumulative tax of 56%.
In Maharashtra, both cable and DTH operators pay an entertainment tax of Rs45 per subscriber per month.
India had 112 million television households in March 2007, out of which 68 million receive cable and satellite channels and two million are served by DTH companies, according to a study by audit and consulting firm PricewaterhouseCoopers and industry lobby Ficci.
Dish TV claims a subscriber base of 2.7 million and Tata Sky claims it serves 1.5 million subscribers.
Industry estimates put the number of cable and satellite houses in Mumbai at 2.5 million of which 5% are served by DTH companies.
“I have no comments to make on what the state government has said, we’ll talk to our parent ministry, the information and broadcasting ministry,” said Jawahar Goel, managing director, Dish TV India.