CASBAA concern over new Indian STB duty

Rose Major

The Cable & Satellite Broadcasting Association of Asia (CASBAA) has gone into bat for its Indian members, expressing its concern over the government’s recently-announced additional duty on imported set-top boxes.

The government announced just over a week ago that it would add a 5% duty on the import of set-top boxes, although duty on LCD TVs is to be reduced, from 10% to 5%.

Most of India’s set-top boxes are imported, with about 80% of imports coming from China and South Korea.

CASBAA said the move on set-top boxes “may prove detrimental for consumers who will now need to pay more for digital services such as DTH (Direct to Home satellite) and digital cable TV subscriptions.

“While the duty cut on LCDs is welcomed, in the short-to-medium term STB imports will be hit hard and service providers – generators of sizeable tax revenue for the government and employment for millions of Indians – will be forced to review their business models, ” added CASBAA.

While there are some 16 million digital homes in India, digital cable growth in particular “remains woefully slow”. And CASBAA claims even the rapidly-growing DTH sector (now with 13 million-plus subscribers) could be hit by the extra duties, with growth slowing.

Multiple taxation levels, covering license fees, service taxes, entertainment taxes and VAT on installed equipment within customer premises can account for over half the revenues from a subscriber, CASBAA claims. And while imported telecoms equipment is exempt from basic customs duty, duties for imported head-end equipment for cable and satellite TV systems vary from 7.5% to 10%.

In light of Prime Minister’s Office (PMO) policies intended to rapidly digitize broadcast services, and regulator TRAI’s strong recommendations on digitization, CASBAA reckons “tax concessions are essential if digitalization is to receive a fresh impetus. Without doubt, uneven taxes deliver uneven results”.