Prasar Bharati for levying 5-10% tax on TV viewers, buyers
July, 11th 2007
Proposal will affect sales: Industry
Public broadcaster Prasar Bharati has submitted a set of proposals to the Group of Ministers (GoM), in an attempt to make itself financially viable. The proposals include levying a 5 to 10 per cent tax as annual licence fee on television (TV) viewers as well as a one-time cess on consumers who buy colour TV sets.
The proposals are due to be reviewed by the GoM, headed by the Union Home Minister, Mr Shivraj Patil, at a session on July 12. The public broadcaster is betting on levying taxes on television viewers as one of the main sources of increasing its revenues.
The proposal of levying taxes on viewers, however, has not met with positive responses from the employees of the organisation, who have been demanding improvement in remuneration standards for sometime now.
Mr Anilkumar S, President, National Federation of Akashvani and Doordarshan Employees, said, The proposal is not practical, since this method of garnering revenues benefits none. Over and above it will meet with heavy opposition from the industry.
The federation, on the other hand, has proposed an autonomous structure for the public broadcaster on content issues, while bringing remuneration and other monetary issues under the purview of the Central Government, to assure job security for the employees.
Meanwhile, the industry, upset with the proposal, said that such a decision would result in a decrease in the sales of colour TVs that would adversely effect not only the manufacturers and consumers but also the Government.
The Consumer Electronics and Appliances Manufacturers Association said, Over 60 per cent of TV sales are to low income people in the rural market, since it is the only affordable means of entertainment and information for the rural masses. The imposition of the levy would make this product costlier by 10 per cent and will result in a drop in sales of TV sets.
According to the current tax structures on colour TVs, average customs duty is around 8 per cent, excise duty is 16 per cent, Central sales tax is 4 per cent and State VAT is 12.5 per cent.
Industry leaders, also said, At a time when the industry is seeking to fuel growth through aggressive price cuts and seeking the support of the Government through further tax reduction, the imposition of this recurring cost to consumers will act as a deterrent to the growth of the industry.