ASSOCHAM said it has urged Finance Minister Pranab Mukherjee to withdraw five per cent Customs Duty on Set Top Box (STB) in Budget proposals for 2010-11 to provide support to the DTH industry.

Customs Duty on STB had been exempted in 2006 to provide impetus to industries involved in digitisation of TV services like DTH, IPTV and Digital cable. However, five per cent Customs Duty on STB was re-imposed in Budget 2009-10.

According to the chamber, the customs duty of five per cent is undue imposition since the government is committed to bring in digitisation of TV services by 2010.

In a representation submitted to Finance Minister, ASSOCHAM President Dr Swati Piramal said that by supporting DTH and other addressable platforms like digital cable, IPTV, which use STB, digitalisation can realistically be achieved in the entire geographical area of the country in a transparent shortest possible time.

‘Both the urban as well as rural and remote areas should be provided with the same quality of service,’ she said.

According to the industry body, DTH is also the most effective alternative to analogue cable platform, which is marred by huge revenue leakages owning to its un-addressable nature.

The chamber said it is estimated that the revenue loss to the government is about Rs 4,500 crore per annum on account of under-declaration in the cable business.

Presently, the chamber said, DTH industry is burdened with huge growth dampeners due to multilayered tax structure aggregating to 59 per cent of the gross revenue of the operators.

As per the estimates, operating losses of DTH operators in 2008-09 were about Rs 2,000 crore. According to ASSOCHAM, cumulative losses by the end of 2008-09 were more than Rs 5,000 crore.

Dr Piramal said the objective behind exempting customs duty on STB is pertinent particularly on account of non-availability of components and other factors required to make STB as 80 per cent of their components are imported.

Therefore, she said, till a mature eco system for STB manufacturing is not in place in India, the timing is not opportune for the imposition of continuation of any customs duty on STBs.

UNI