Cable television network companies, demanding their withdrawal from the service tax net, have threatened blackouts in the four metros.
The government had increased the service tax from 8 per cent to 10 per cent in the Budget and widened its net to include cable network companies, among other services.
It has been pointed out that while the government has decided to impose additional tax on cable network companies, they are not allowed to pass this on to consumers.
A Telecom Regulatory Authority of India (TRAI) order prevents them from hiking subscription rates. The regulator, in December last year, had frozen the subscription rate till a decision on the conditional access system was taken.
Finance Minister P Chidambaram’s proposal to bring independent television programmers into the service tax net will also increase the operational cost for TV channels.
“We have certain concerns. The hike in service tax to 10 per cent and the widening of the tax net to include independent TV programme producers will have a negative impact on costs,” said Virendra Gaur, president, Cable Operators United Front.
“An increase in electricity tariffs, new channels turning pay, sports channels increasing the rates and high inflation have necessitated an increase in the subscription rates,” said Roop Sharma, president of the Cable Operators Federation of India.