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Rationalise DTH taxes: Plan panel
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New Delhi: The Planning Commission wants the ministry of information and broadcasting (I&B) to rationalise the license fee and tax structure for direct-to-home (DTH) broadcasting players. The move is expected to boost the growth of the DTH service in the country.

"The growth of the DTH services sector can be substantially increased by rationalising of licence fee and tax structure for which there is already recorded grievance at the ministry of I&B," says a note prepared by the Planning Commission on the entertainment and media industry.

DTH service refers to accessing TV channels through a satellite system. A DTH subscriber gets broadcasting signals from the satellite by getting a dish and a set-top box installed at his premises.

The plan panel note follows the request of DTH players, who have urged the government to rationalise the taxation structure on DTH service. In a letter earlier to the I&B ministry, one operator had said that even though DTH was considered to be a nascent segment, the levy of taxes by various government departments works out to be about 50%.

DTH operators have asked the government to categorise them as service providers, thus exempting the sector of entertainment tax.

At present, the DTH services are subject to multiple taxation which include a licence fee of 10% on their gross revenue. In addition, there is a 12.3% service tax charged on the subscription fee revenue earned by the DTH service providers.

Currently there are six private players in the market -- Zee group's Dish TV, TataSky (a joint venture between Rupert Murdoch's Star and the Tata group), ADAG group's Reliance Big TV, Sun TV, Bharti group's Airtel, and Videocon.

Also, there's a free-to-air DTH platform of public broadcaster Prasar Bharati -- DD Direct Plus.

The total DTH subscriber base is over 16 million at present, and expected to touch 20 million by the end of this financial year. These numbers do not include the users of Prasar Bharati DTH.

According to industry estimates, the DTH industry is likely to have a subscriber base of 25 million by 2012.Another projection suggests that by 2015, 40% of the pay TV universe is likely to be made of DTH users.

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