Television viewing to be slightly more expensive – Tax to hike cable TV rates

Jharkhand High Court upheld imposition of entertainment tax by the state government on cable and direct to home (DTH) services, making television viewing a slightly more expensive proposition for some viewers.

While cable services provided by local operators will be charged at 7.5 per cent, DTH services will be levied a 10 per cent entertainment tax.

But DTH subscribers like, say, Tata Sky or Dish TV, will probably be spared the hike. That’s because most of these companies, which offer services throughout the country, absorb these taxes and the license fee, while charging the consumer.

Company sources claimed the idea was to ensure that their rates remained uniform nationally.

At least Tata Sky, one of the five companies that challenged the provisions of Jharkhand Entertainment Tax Act, 2012, has clarified that their rates would remain unchanged in spite of the order.

Today, a division bench of Chief Justice R. Banumathi and Aparesh Kumar Singh dismissed the five petitions filed by DTH companies Ms. Bharti Telemedia Limited, Tata Sky Limited, Bharat Business Channel Limited, Dish TV India Limited and Reliance BIG TV Ltd.

Challenging the provision of the act, the companies questioned the state government’s authority to impose entertainment tax when they had already obtained licenses from the Union government.

The companies held that they had deposited license fees of Rs 10 crore and furnished a bank guarantee of Rs 40 crore for operating for a period of 10 years. They were also due to deposit an annual fee equivalent to 10 per cent of its gross revenue in a financial year.

Advocates representing the DTH companies said the service provided by them was pre-paid, wherein the subscriber was required to purchase recharge vouchers to top-up his/her balance.Monthly charges varied from Rs 160 to Rs 300 depending on the number of channels subscribed to.In its 81-page judgement, the court observed that “entertainment” was separate from the “service” provided by DTH companies, and that “entertainment” had been defined in the Jharkhand Entertainment Tax Act, 2012.

Source: http://cablequest.org/news/national-news/item/4200-television-viewing-to-be-slightly-more-expensive-%E2%80%93-tax-to-hike-cable-tv-rates.html