A pleasing news for DTH players who were suffering from multileveled taxation charges for entertaining the people as now the Telecom Regulatory Authority of India (TRAI) has approved the Information and Broadcasting (I&B) Ministry’s proposal to reduce license fee of Direct to Home (DTH) service providers from its current 10% of gross revenues to that of its 6%.
Earlier, TRAI has recommended to I&B Ministry to impose the 8% of tax instead of 10% at the base of Adjusted Gross Revenue (AGR) not on the base of gross revenue.
However, I&B Ministry after analysing decided to set the levied tax structure at 6% of the gross revenue and forward its proposal to TRAI to accept it. TRAI has accepted this proposal and is now going to implement it on DTH players.
This proposal would be beneficial for all the DTH players but does not seem to be fruitful for the consumers as none of the players want to share this rebate with the consumers, as market expert assumes.
However, the time would tell the real story as an official stated on the tax-relief matter.
At present, the TRAI players have to bear a burden of 56% of total taxes via several means and this 4 % rebate in the tax would prove a huge relief for DTH players while this move of government would also motivate others to hike the competition by entering in this field.
As per I&B ministry officials, the ministry had analysed that changing the basis of calculation from the existing gross revenue to adjusted gross revenue may enable some companies to hide their actual shareable revenue that would also lead the ambiguity of the system.
The ministry also estimated that reducing the tax on licence fee would not affect the overall revue as the number of players and consumers would increase and recover the total lose.
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