22 Sep 2017
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Cable TV digitisation leads to 26% growth in entertainment tax collection in 8 states

MUMBAI: The collection of entertainment tax in the states has been on an upswing ever since the government’s digital addressable system (DAS) came into force in 2012.

The impact of cable TV digitisation has led to a 25.88% growth in entertainment tax across eight states. In FY16, entertainment tax collection in eight states rose to Rs 358.28 crore compared to Rs 284.63 crore in the previous fiscal year. The growth is almost 128.04% when compared with Rs 157.11 crore in FY2013.

The eight states in question are Bihar, Gujarat, Karnataka, Maharashtra, Mizoram, Rajasthan, Uttar Pradesh and Uttarakhand.

Maharashtra tops entertainment tax collection

At Rs 114.07 crore, Maharashtra had the highest entertainment tax collection in FY16. It was closely followed by Rajasthan with a collection of Rs 101.07 crore.

Uttar Pradesh had the third-highest collection at Rs 87.32 crore. Uttarakhand was at fourth with Rs 28.96 crore of entertainment tax collected in FY16.

CABLE TV DIGITIZATION IMPACT ASSESSMENT OF ENTERTAINMENT TAX COLLECTION (R IN LAKHS)

The Ministry of Information & Broadcasting (MIB), in its assessment of DAS, has stated that entertainment tax collection has been one of the biggest benefits of the exercise.

First 3 phases comprise 50% of India’s total STBs required  

The first three phases of DAS has led to a seeding of 70 million set-top boxes (STBs). This accounts for 50% of cable TV digitisation, the MIB has said.

As per Census 2011, the total number of TV households in India stands at 11.7 crore (117 million). By adding 20% provision for multiple TV in houses and TVs in offices/shops, the number of homes to be digitised stands at 14 crore (140 million).

“As can be seen from above, Phases I, II and III together have led to about seven crore, i.e. 50% of the cable TV digitisation, i.e. out of a total of 14 crore STBs required, seven crore STBs have already been installed,” the MIB stated in its annual report.

It is pertinent to note that the ministry has extended Phase IV deadline to 31 March 2017.

STBs seeded in Phase I

About 8.5 million cable STBs have been installed in Phase I cities. According to the MIB, 3.4 million STBs were installed in Delhi, followed by 2.6 million in Mumbai, 2.2 million in Kolkata and 3.5 lakh in Chennai.

STBs seeded in Phase II

In the second phase, 21.5 million STBs were seeded. This takes the total for the first two phases to 30 million, according to the MIB.

STBs seeded in Phase III

In the third phase, around Rs 40 million STBs were seeded. This leaves 70 million homes in Phase IV which are yet to be digitised.

Cable TV digitisation has brought transparency, thus making it difficult for a multi-system operator (MSO) or a local cable operator (LCO) to under-declare the cable subscriber base, the MIB noted.

According to the MIB, the other benefits of DAS are choice from a large number of channels including HD channels, quality picture and sound, reduction in carriage fee and increase in subscription revenue.

So far three phases of DAS have been completed. Phase I of digitisation was completed by 31 October 2012. Digitisation has been near total in three out of the four metro cities, namely Delhi, Mumbai and Kolkata. Chennai is yet to undergo the digital transition due to several pending court cases.