Waive service tax till GST rollout: Dish TV

[Sarkar]

New Delhi, Jan:

14 Direct-to-Home operator Dish TV has requested the government to waive 12.36 per cent service tax till the rollout of GST and rationalise other taxes imposed on the industry.

The Zee group firm has asked the government to waive the service tax till Goods and Services Tax (GST) regime is implemented as the industry is paying double taxation to central government and state governments.

Dish TV in a letter to the Finance Ministry has said that the DTH industry is taxed heavily and there is disparity with rival local cable delivery systems, which have to pay less taxes and this gives them an upper hand. These taxes are “causing hindrance to survival and growth of the DTH industry,” it said.

“We seek your immediate attention on the subject matter and request your good self to issue notification granting exemption from service tax to DTH services provided in India till the time GST is implemented,” the firm said.

According to Dish TV, at present the DTH industry has to pay multiple tax levies up to 50 per cent tax, while their rival local cable operator has to pay only 32 per cent.

“This has made a superior technology for television costlier and unaffordable to the common man, especially in comparison to the parallel mediums reaching to masses such as cable and cinema,” it said.

The DTH industry is paying entertainment tax ranging from 10 per cent to 45 per cent to various state governments, while service tax of 12.36 per cent on its subscription revenue to the central government.

In addition to that, the DTH industry is also paying 10 per cent of their gross subscription revenue as their licence fee to the Union government.

Moreover, sale for equipment during new connections as set-top box, dish antennas are also subject to VAT.

“No other service industry is taxed so heavily and there is apparent disparity amongst comparable mediums reaching to masses. For example, unlike DTH service providers, cable operators are not liable to pay any licence /entry level fee. This gives them upper hand over DTH service providers,” it said.

It contended that even cinema, which is a comparable medium is also not so heavily burdened with double taxation.

The DTH operator has requested the government to “bring the parity amongst parallel mediums” of TV channel delivery so that there is a healthy competition in the sector.

“In order to bring the parity amongst parallel mediums, to make DTH technology reachable to masses as well as to boost the growth of DTH technology, it is crucial for the Government to rationalise taxes/license fee levied currently on DTH services,” it said.

Waive service tax till GST rollout: Dish TV | Business Line

 

[Sarkar]

DishTv is really running out money. Indiacast also indicated that in interview. I think their ARPU is very low compared to other DTH operators as they submitted only 112 crore. They should migrate to MP4 to save money used for TP rent.

 

[NinadG]

It seems only Dishtv is making noise for taxation. If govt waives service tax for DTH industry till GST rollout then other industries also put their demands for same. This will cause havoc for Indian economy.

 

[NinadG]

I think if Dishtv migrate to mp4 then Dishtv will lose an argument against portability & then it will become easy to push for DTH portability. But mp4 migration will depend on cost consideration because Dishtv already has multi-sat TP infrastructure unlike TS which is locked with unreliable ISRO TPs. So I think it doesn't make any sense throwing Rs 1000 crs for migration like TS in short time which will again indirectly affect to subscriber costs.

 

[Anirudha]

Dishtv is running in old technology and because of that they have a big losses but the problem is they can't afford new technology because of money crisis.

 

[Sarkar]

I think if Dishtv migrate to mp4 then Dishtv will lose an argument against portability & then it will become easy to push for DTH portability. But mp4 migration will depend on cost consideration because Dishtv already has multi-sat TP infrastructure unlike TS which is locked with unreliable ISRO TPs. So I think it doesn't make any sense throwing Rs 1000 crs for migration like TS in short time which will again indirectly affect to subscriber costs.

I think too much foreign tp is hurting DishTV revenue as they are using mp2. Low ARPU (lower than TS as TS paid 121 crore where as Dish TV paid 112 crore)is also another issue. That is why they are asking for carriage fee from broadcaster, shouting for tax relaxation. D2h or ADTV also use foreign sat but mp4 saves them from hiring additional tp capacity which ultimately save cost.

 

[Anirudha]

I think too much foreign tp is hurting DishTV revenue as they are using mp2. Low ARPU (lower than TS as TS paid 121 crore where as Dish TV paid 112 crore)is also another issue. That is why they are asking for carriage fee from broadcaster, shouting for tax relaxation. D2h or ADTV also use foreign sat but mp4 saves them from hiring additional tp capacity which ultimately save cost.

Yaah that is the point Videocon and Airtel gets the benefit because they come last into this business with new technology and Dishtv running in old technology as they come first in DTH business.

 

[Sarkar]

DishTV is paying almost 8 crore for ses-8 satellite's 36 mhz per tp per year where as TS is paying only half of that i.e. 4.6 crore for INSAT-4A's 36 mhz per TP per year. So foreign TP is twice costly than Indian TP. I think that is why TS didn't hire any foreign sat and decided to stick to Isro.

 

[NinadG]

It seems TS made a great deal if the prices are correct. I think Insat-4A is one of the oldest sat & SES-8 is newest so the price difference. Also definitely old mpeg2 tech has overhead as compared to mpeg4 tech. But I think it makes sense to migrate to mpeg4 tech in long term than to throw Rs 1000 crs in one year. Dishtv can stop seeding mpeg2 boxes & slowly convert all old SD boxes to mpeg4 but I think they are not interested in it, atleast there is no news. May be they have their own strategy to deal with it.
For customers it doesn't make any difference whether they use 1,2 or 10 sat or use mpeg2, mpeg4 or any other tech. Ultimately STB price, Pack price & channels, cc, PQ/AQ are the main factors considered by customers.

 

[Sarkar]

It seems TS made a great deal if the prices are correct. I think Insat-4A is one of the oldest sat & SES-8 is newest so the price difference. Also definitely old mpeg2 tech has overhead as compared to mpeg4 tech. But I think it makes sense to migrate to mpeg4 tech in long term than to throw Rs 1000 crs in one year. Dishtv can stop seeding mpeg2 boxes & slowly convert all old SD boxes to mpeg4 but I think they are not interested in it, atleast there is no news. May be they have their own strategy to deal with it.
For customers it doesn't make any difference whether they use 1,2 or 10 sat or use mpeg2, mpeg4 or any other tech. Ultimately STB price, Pack price & channels, cc, PQ/AQ are the main factors considered by customers.

Absolutely. :tup It doesn't make any difference unless he/she sees channel discontinuation notice from broadcaster on morning news paper with a cup of tea whether for TS or Dishtv or any other DTH.