DTH industry slams doubling of entertainment tax by AAP as 'illogical and unfair'

In the annual budget announced on Thursday, the govt proposed a flat Rs 40 tax on cable and DTH services

The proposed increase in entertainment tax announced by the Aam Aadmi Party (AAP) government in Delhi on direct-to-home (DTH) operators and cinema halls has not gone down well with the players those areas.

In the annual Budget announced on Thursday, the Delhi government proposed a flat Rs 40 tax on cable and DTH services and doubling of entertainment tax on cinema halls from 20 per cent to 40 per cent.

Reacting to the development, Anil Khera, president of DTH Association of India, said the move is detrimental to the growth of the DTH sector.

“The recent announcement of doubling of entertainment tax on cable TV and DTH services made by the Aam Admi Party (AAP) government seems unfair and illogical. DTH as a platform is considered critical to the citizen’s right to information, news, education and entertainment. The sector is already saddled with a high tax, where 33 per cent of revenues are taxed between the Centre and state,” he said.

He added that DTH operators - Tata Sky, Dish, Airtel, Videocon D2h, Sun and Reliance - will have no choice other than to raise their tariffs in Delhi to accommodate this hike in entertainment tax, and the burden will finally fall on the customer. “By dropping electricity prices on the one hand and increasing entertainment tax on DTH on the other, it does not seem like a move in favour of the Aam Admi! Is this how we plan to achieve a balanced Budget and reduce fiscal deficit?” Khera asked.

The dual taxation has been an issue the DTH sector has been battling for quite some time now. Earlier this year, the sector had requested the government to reduce the tax burden on DTH players by either reducing the tax or working out a system where the burden comes down. The DTH operators currently pay service tax to the Central government and entertainment to the respective governments in states where they have a presence. The operators also pay the licence fee to the Centre.