Govt looking into tax rationalisation demand of DTH operators

The government is considering the long-pending demand of the DTH industry for rationalisation of tax structure for the sector which feels burdened by multiple taxes that amount to around 33% of its revenue.

Direct-to-Home (DTH) operators feel the double taxation -- service tax by the central government and entertainment tax by various states -- is unjustified and needs to be rationalised.

"We are aware of the issue. It is being discussed and it is now with the Ministry of Finance," Information and Broadcasting Minister Prakash Javadekar told PTI.

The industry players are watching whether and when the government addresses their concern.

"We are paying around 12.36% as service tax and 11% as entertainment tax. Over 33% of our revenue goes in taxation," said Harit Nagpal, President of DTH Operators Association of India.

"Till GST is not rolled out, the industry should get abatement in paying service tax... We are ready to pay taxes but we should not be taxed by the central government and state government both," said Nagpal, who is also CEO & Managing Director of TataSky.

The industry is also expecting the license fee to be rationalised.

"We are paying 10% of our revenue as license fee to the government. When it was introduced there was no service tax or entertainment tax applicable on us. Now we are paying taxes, the license fee should also be rationalised," Nagpal said.

India at present has 35 million active DTH connections and is growing rapidly.