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Dish TV, Sun Direct get interim relief from High Courts in licence fee case

MUMBAI: Seeking clarity to continue paying licence fee the way they have been doing, two direct-to-home (DTH) operators moved different courts individually.

Dish TV and Sun Direct have secured relief from the Jammu & Kashmir and Kerala High Courts in the licence fee case.

dish-tvIn the case of Dish TV, the J&K High Court passed an order stating that the petitioner (Dish TV) would continue to pay the licence fee based on the judgment of the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) delivered on 28 May 2010. The HC also directed the government to file its response within four weeks.

The Kerala High Court also accepted Sun Direct’s plea for directing the government to accept licence fee payment only on licensed activities until the disposal of the petition. The HC directed the government not to take coercive action against the DTH operator until the disposal of the matter.

On 28 May 2010, the tribunal had passed an order allowing Sun Direct and Bharati Telemedia’s (Airtel Digital TV) petitions entitling them to the benefit of the judgments passed by it on 7 July 2006, 30 August 2006 and 26 August 2008, as well as the recommendations of the Telecom Regulatory Authority of India (TRAI) dated 1 October 2004.

These orders state that the licence fees for DTH operators should be applied on the basis of adjusted gross revenue (AGR), which means total revenues excluding items that are of a pass-through nature.

sun direct 01In its judgment dated 7 July 2006, the tribunal had stated that the AGR in case of DTH service would exclude i) subscription fee charges passed on to the pay channel broadcasters; ii) sale of hardware including integrated receiver decoder required for connectivity at the consumer premise; and iii) service/entertainment tax actually paid to the central/state government, if gross revenue had included them.

The DTH operators are currently required to pay 10 per cent of their gross revenue (GR) as licence fee. The TRAI has, however, recommended to the Ministry of Information & Broadcasting (MIB) that the licence fee should be levied at 8 per cent of AGR where AGR is calculated by excluding the following from the GR—Service Tax, Entertainment Tax and Sales Tax/VAT actually paid to the government.

Pertinently, the DTH operators also challenged the MIB’s 24 March 2014 notice to DTH operators wherein the ministry had asked them to fork out Rs 20.66 billion in licence fee dues. The matter is currently pending before the TDSAT.