New Indian STB Tax Raises Concerns

HONG KONG: The Cable and Satellite Broadcasting Association of Asia (CASBAA) has expressed concerns over a new tax being levied on set-top boxes imported to India, arguing it could slow the growth of the country’s pay-TV market.

Earlier this month, India’s finance minister, Pranab Mukherjee, announced a 5-percent customs duty on imported set-top boxes (and reduced the tax on LCD TV sets from 10 percent to 5 percent). CASBAA argues that the new STB tax will result in consumers having to pay more for DTH and digital cable 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,” the industry body said in a statement.

The number of digital homes in India currently stands at 16 million, CASBAA reports, out of the total 82 million cable-TV connections. “Tax concessions are essential if digitalization is to receive a fresh impetus," CASBAA says. "Without doubt, uneven taxes deliver uneven results."

Simon Twiston Davies, the CEO of CASBAA, noted: “The broadcast industry still needs government support in the form of a reasonable (and reasoned) tax environment if it is to grow further. Only then can Indian media and communication companies truly deliver genuine choice at a genuinely competitive market price."