GST on cable & DTH operator

 

Reduction in the rate to 18% on cable TV and DTH services under GST

As we all know India is globally the fifth largest market wise Industry in media and entertainment. The Indian media and entertainment industry is a raising sector, with a rapid growth curve. It is one of the highest spending and growing Industry globally.

Impact of GST:

With the Introduction of GST, Cable and DTH operators are in a advantageous situation. It is because now Broadcaster will have to pay 18 percent tax under GST compared to 21 percent under earlier regime. (i.e. 15 percent under service tax and 6 percent under VAT).

Taxation on cable & DTH services comes down under GST as the ‘entertainment tax’ levied by states has been subsumed by GST. In Earlier Taxation System, there were no set off provision for the Entertainment Tax against Service Tax or VAT paid by the distributor, so the levies were cumulative. Thus, the ultimate customer has to be bear the total tax burden.

The broadcasters also upbeat about the tax slab. “The entertainment tax that the DTH/Cable operators were paying on the subscription income has been subsumed into GST at 18 per cent which is slightly lower than the previous levy. Hence we see a neutral to marginally positive impact on the subscription revenues.”

In addition to the lower tax rate of GST, the service providers are also eligible to claim ITC (Input Tax Credit) of GST paid in respects of Inputs & Input services.

The GST will subsume 16 different taxes, including excise, VAT, service tax and entertainment tax, and will transform India into an unified market for seamless movement of goods.

Manav Dhanda, ‎Group CEO, SAB Group – Sri Adhikari Brothers Ltd, points out that GST provides ease in conducting business as broadcasters gaining a saving on VAT. “GST witnesses a lasting impact within various facets of the economy and also beneficial in terms of ease of doing business.