Broadbandindia Magazine

Delegations of print media, broadcasters and small and medium newspaper owners had met Ambika Soni, the Ministry of Information and Broadcasting (I&B) and had put forward their proposals and requests before her. The minister took up their proposals with the FM for the forthcoming Union Budget.

The minister has suggested a fiveyear tax holiday for those offering digital television services and reduction in the fringe benefit tax (FBT) from 20% to 5% for media personnel working for both print and electronic media companies among other. ”I have requested the finance minister to reduce the FBT levied on expenses made by journalists in both print and electronic media and bring it to the level of 5% from the current 20%,” Soni said. Soni also requested the finance minister to bring down special additional duty (SAD) and countervailing duty (CVD) on digital set-top boxes to 0 % for at least a period of five years.

Digitalization

3“Digitalization is the future of the broadcasting sector. The $ 4.5 billion Indian broadcasting sector is gearing up for a war of attrition and only those with courage, capital and content are likely to survive and prosper.

Intensifying competition, growing digital pay-TV penetration, the launch of hundreds of TV channels and the entry of new investor groups are all going to come at significant cost for media owners, pay-TV platforms, and television advertisers as regulation further squeezes the pricing of television channels, many of whom will look to grow and capture their fair share of advertising through significant rate increases.

After years of disappointing delays and distractions, digital cable is finally making its long-awaited debut across the vast Indian subcontinent. Many MSOs are now rolling out digital service in select markets throughout the booming country. I have asked for a reduction of duties on digital set-top boxes for both DTH and digital cable to 0 %, at least for the next 5 years,” Soni told reporters. Currently, SAD and CVD on set-top boxes are 4% and 8%, respectively.

Headend in the Sky (HITS)

The Ministry is suggesting the tax holiday for satellite-based cable Headend in the Sky (HITS) and similar service providers distributing digital content. They could be taxed for 30 % of their profits for the following five assessment years in a block of 15 years, suggest the Ministry. With this, the move to introduce a HITS delivery platform has received a boost. This will promote digital transmission of television channels leading to high-quality images and sound. HITS is a satellite-based delivery platform for delivering multi-channel TV signals to cable operators across the country in the digital form with addressability features.

A HITS operator uplinks signals of TV channels of different broadcasters to his HITS satellite in the sky and cable operators can downlink these channels from the satellite for further distribution to the subscribers through their cable network in digital form. Since the HITS satellite will have country-wide footprint, it will benefit about 60,000 cable operators who serve nearly 70 million cable TV homes. A HITS operator will provide digital signals of TV channels only to the registered multi-system operators (MSOs) and cable operators only and not directly to subscribers.

Foreign direct investment (FDI)

On the issue of increasing the foreign direct investment (FDI) limit in various sub-sectors within media, Soni said: “We will take some decision on it soon. We have worked out this aspect as per TRAI’s recommendations. We have to discuss this matter with some other ministries like home affairs, as there are some reservations in certain segments like radio. But I have given the breakup of FDI limits in various segments to the finance minister.”

Gaming, animation and the VFX (visual effects) Soni also pushed for a 10-year tax holiday for the gaming, animation and the VFX (visual effects) industry, as they were emerging sectors. The minister also had a discussion on the issue of Goods and Service Tax (GST). The Ministry has assured all help and assistance to  boost gaming, animation and the VFX (visual effects) industry in the country, which he described as not only entertaining but also educating in social life and employment generating. The Minister said that the country has bountiful creative and technological talent available, and can become hub for outsourcing as well as making and exporting original animation films to other parts of the world.

FM radio & DTH

Broadcasters had suggested to the minister that, for FM radio and DTH operators, service tax, entertainment tax and VAT may be subsumed in GST and only a single unified GST rate be notified for these services. The minister also put forward before the FM, the proposal of treating broadcasting, DTH and cable services as part of infrastructure industry for their rapid expansion. The Ministry’s proposals also include scrapping of Special Additional Duty, which is levied at 4%, and Countervailing Duty, which is levied at 8%, on digital set top boxes in order to give a boost to the CAS regime.

Moreover, inclusion of broadcasting and cable sector in the proposed Goods and Services Tax (GST) has also been sought. The Ministry has suggested that for  DTH, FM operators and cable services and similar content distribution services, the service tax, entertainment tax and VAT may be subsumed in the GST and only a single/ unified GST rate be notified for these services.