DTH firms under pressure as govt demands Rs 16,000 cr as licence fees

Sector is battling shrinking revenue and subscriber base; its representatives say ministry notices are not legally enforceable

      The Information and Broadcasting Ministry has issued notices demanding Rs 16,000 crore from four private direct-to-home (DTH) companies for unpaid licence fees — a move that is likely to hurt the struggling sector, The Economic Times reported on Friday.

 

The notices demanded principal dues and accumulated interest from Bharti Telemedia (parent of Airtel Digital TV), Tata Play (formerly Tata Sky), Dish TV and Sun Direct. Industry representatives have told the Ministry the demand is not enforceable as the matter is before High Courts, the Telecom Disputes Settlement and Appellate Tribunal and the Supreme Court.

 

Tax demand exceeds FY24 revenue

 

The ministry’s demand exceeds the four companies’ combined FY24 revenue of Rs 10,230 crore, which is a 5 per cent decline from Rs 10,837 crore they earned in FY23. The sector lost eight million subscribers between FY21 and FY24. As of December 2024, the active pay DTH subscriber base was reported at 58.22 million.

 

Final figures subject to changes, says MIB

 

In its communications to the companies, the ministry said that the final figures are provisional and subject to reconciliation based on the outcomes of ongoing audits by the Comptroller and Auditor General and pending court verdicts.

 

Dish TV, in its Q4 FY25 regulatory filing, said it had received a directive from the ministry on April 22 to pay Rs 6,735 crore in licence fees, including interest for the period from the issuance of its DTH licence through FY24. The company has formally disputed the demand.

 

As of FY24, Tata Play has received a cumulative demand of Rs 3,628 crore, including Rs 1,401.66 crore in interest. Meanwhile, Sun Direct was issued a demand of Rs 1,051.84 crore, excluding interest, as of March 2024.

 

SC upholds states’ right to levy entertainment tax

 

Compounding the industry's financial woes, the Supreme Court on May 23 upheld the constitutional validity of entertainment taxes imposed by state governments on cable and DTH television services.

 

The court ruled that states have the legislative right to tax the entertainment aspect of these services, even if the broadcasting function is already covered under the Centre’s service tax regime.

 

Appeals by DTH operators rejected

 

The Supreme Court dismissed appeals by leading DTH providers including Tata Sky, Dish TV, and Sun Direct, who had contested various state entertainment tax laws. The companies argued that the taxes were unconstitutional due to the Centre’s existing service tax on broadcasting. The court, however, upheld the states' authority to impose such levies.