Operators agree that despite being pro-technology, the government is playing spoilsport in their case and hence they are unable
to curb the reds in their annual reports, which is also hampering future expansion plans. Kaushik points out, “The burden of taxation on DTH players is very high,” referring to the huge 56% tax that DTH subscribers have to pay as consumer tax. These include sales tax, VAT, excise duty, et al, over and above the 3% CST. Not to forget the 10% license fee and corporate tax that the government charges. Of late, there has been some relief that has come their way in the form of a cut in the license fee on April 16, 2008 by the I&B ministry. The fee, which was earlier 10% has been brought down to 6%. However, operators consider the move as a mere drop in the ocean, given the deluge of taxes that they have to pay.
There’s good news in the offing too. The government has expressed its keenness to roll out the second phase of CAS (Conditional Access System), and soon. When this happens, DTH companies can make maximum hay, as witnessed in the previous round of CAS implementation. At the time, while the analog CAS was able to woo about 5,20,000 subscribers, DTH players managed to walk away with a booty of 6,00,000 subscriber additions. Tata Sky, which went into a marketing overdrive around the time (and even roped in Bollywood stud Hritik Roshan as brand ambassador) was able to add over one million subscribers to its kitty, in merely a year of operations.
There’s a caveat to these happy times though. CAS implementation in India has always been a contentious issue (with cable operators up in arms against it and even some state governments opposing its implementation) and implementing the 2nd phase will be no cakewalk. “The first round of CAS was greeted with mixed experiences on the part of the government as well as the DTH operators,” says Kaushik, adding that there are still a few loose ends that the government wants to work on before giving a green signal to the 2nd phase of CAS (which includes enacting and policing stringent compliance norms).
to curb the reds in their annual reports, which is also hampering future expansion plans. Kaushik points out, “The burden of taxation on DTH players is very high,” referring to the huge 56% tax that DTH subscribers have to pay as consumer tax. These include sales tax, VAT, excise duty, et al, over and above the 3% CST. Not to forget the 10% license fee and corporate tax that the government charges. Of late, there has been some relief that has come their way in the form of a cut in the license fee on April 16, 2008 by the I&B ministry. The fee, which was earlier 10% has been brought down to 6%. However, operators consider the move as a mere drop in the ocean, given the deluge of taxes that they have to pay.There’s good news in the offing too. The government has expressed its keenness to roll out the second phase of CAS (Conditional Access System), and soon. When this happens, DTH companies can make maximum hay, as witnessed in the previous round of CAS implementation. At the time, while the analog CAS was able to woo about 5,20,000 subscribers, DTH players managed to walk away with a booty of 6,00,000 subscriber additions. Tata Sky, which went into a marketing overdrive around the time (and even roped in Bollywood stud Hritik Roshan as brand ambassador) was able to add over one million subscribers to its kitty, in merely a year of operations.
There’s a caveat to these happy times though. CAS implementation in India has always been a contentious issue (with cable operators up in arms against it and even some state governments opposing its implementation) and implementing the 2nd phase will be no cakewalk. “The first round of CAS was greeted with mixed experiences on the part of the government as well as the DTH operators,” says Kaushik, adding that there are still a few loose ends that the government wants to work on before giving a green signal to the 2nd phase of CAS (which includes enacting and policing stringent compliance norms).
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