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I&B to discuss new tax norm for cable TV today

08-November-2001
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I&B to discuss new tax norm for cable TV today

Two-tier uniform taxation formula that would help the government cover the 33 million cable subscriber base, a ban on the video channel of cable operators, and an anti-video piracy cell are to be debated at the state information ministers conference today jointly organised by the I&B ministry and FICCI.

The tax proposal for the cable industry, suggests a flat simple rate of Rs 10 for subscribers availing free to air channels and Rs 2 per pay channel rate for each pay channel subscribed to.

According to, Hinduja TMT executive vice-president (corporate services) and chairman of FICCI sub committee on the cable industry, Ashok Mansukhani, at present each state uses a different yardstick -- some tax the declared number of cable subscribers while others tax the cable operators -- the rates therefore vary between Rs 4 per and Rs 30 per subscriber.

Ironically the cable industry is an infrastructure/ information provider and does not create any content -- yet, it is the cable operator who is held responsible. State governments are unable to verify and mop up taxes due to the lack of a database. This is because to run a cable business one only needs to register at the local post office.

Though compulsory, state governments do not enforce such registration as it forms part of the Central legislation and the post office does not have anything to do with the cable industry.

The cable industry has however volunteered to "assist" the government in collecting the entertainment duty, provided it is given some mandatory powers.

It is felt that the proposed Conditional Access System would help authorities track subscribers even as subscribers only pay for what they see. However, the threat of video piracy continues, as the video channel is the main source of income for the cable operator.

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