Broadcasters may get Customs relief With Tech Witnessing Convergence, Duty Structure Applicable To I
BUDGET 2008 may bring in some duty cuts for the broadcasting sector (manufacturers, MSOs, cable TV operators) and bring it in line with the IT and telecom sectors. The broadcasting sector is faced with various Customs, excise and service tax slabs. A committee appointed by the Centre with representatives from Trai, I&B ministry, Prasar Bharti, consumer organisations, broadcasters, MSOs, DTH players, cable operators, distributor associations and technical experts, has recommended that since technology is witnessing convergence, the duty structure applicable to the IT and telecom sectors should be extended to the broadcast industry. With telecom players having entered the broadcasting space through emerging technologies like IPTV and DTH, cable operators also want to offer services like IPTV and voice connectivity. The committee has therefore recommended that there should be a level playing field and the industry should be given incentives similar to those offered to telecom infrastructure players. The recommendations are likely to be incorporated in the government’s national plan for digitalisation and have been submitted for considerations to the relevant ministries for the forthcoming Budget. Currently, import duty on set top box is zero. However there is a 10% customs duty levied on some of the components imported by manufacturers. The committee believes that this needs to be corrected. Similarly, set top box makers should be exempted from additional customs duty of 4% that is charged on certain components and items like viewing cards. The committee has also recommend that the excise duty or CVD of 16% levied on some set top boxes components should be brought down to 8%. The committee has come to the conclusion by comparing duties to those enjoyed by telecom infrastructure players. Other equipment used in digital infrastructure, such as digital head end equipment attracts a Customs duty is in the range of 7.5-10% which needs to be removed to encourage consumers to go digital. Other key recommendations include rationalising the 16% excise duty on manufacturing of set top boxes to 8% as the telecom industry faces no excise duty on locally manufactured cell phones. For the DTH sector too, rationalisation in duty structure on set top boxes and the satellite dish as part of the hardware required has been recommended. The committee also believes that DTH and the cable sector face the burden of multiple taxes which includes service tax, entertainment sector, license fee and VAT among others. The committee has recommended formation of a separate committee to suggest a unified taxation structure on both the sectors. In addition the committee believes that both the sectors should be categorised as part of the service sector and thus only service tax should be charged