DTH industry wants duty free import of set top boxes

The direct-to-home (DTH) industry is demanding a duty free regime for imported set top boxes as the industry feels that import duties on these are resulting in increase in cost being borne by the consumer and hence slowing the pace of expansion of the industry. A similar demand has also been made by the cable TV industry.

Economists argue that such a move will have a positive impact on government’s revenue on a net basis as reduction in cost of installation will increase business in both the DTH as well as the cable segment.

Even the information and broadcasting ministry (I&B) has argued that it is in the government’s own financial interest to eliminate all import duties for at least the next five years on digital set top boxes for both cable and direct-to-home segments. The ministry has raised the issue before the finance ministry in the pre-budget consultations which are currently going on for the Union budget for FY10.

At present, imported digital set top boxes attract a special additional duty at the rate of 4% as well as a countervailing duty at 8%. Together these two raises the cost of set top boxes by 12%. The I&B ministry feels that both the duties should be cut for the next five years which will help boost growth of the industry.