Budget view: Uday Shankar, Chairman, FICCI M&E committee

28 Feb,2013

By Uday Shankar

 

FICCI expresses its shock at the proposed doubling of customs duty on the import of Set Top Boxes to 10 per cent from the existing rate of 5 per cent, announced by the Finance Minister in the Union Budget 2013-14.

 

We strongly believe that an increase in import duties on set top boxes will be detrimental to the government’s digitalization programme that was flagged off last year. This move at this stage will hamper the progress of digitalization since it will significantly increase the outlays of the cable and DTH community. It will also adversely impact the government’s tax collections from additional revenues linked to faster digitalization.

 

Availability of lower-priced set top boxes is pivotal for smooth implementation of digitalization. The domestic industry lacks the scale and size required to meet the increased demand for set-top boxes and the industry is heavily dependent on import of these devices to implement the next phase of digitalization. This sharp increase in import duty would escalate the costs for consumers and can potentially derail the digitalization process.

 

FICCI has been consistently recommending the lowering of customs duty on set-top boxes. The government could have instead considered lowering excise duty on local manufacturing of set-top boxes, thereby ensuring timely supply of such devices at lower costs and urges the I&B Minister and the Finance Minister to review and reconsider this proposal and provide much-needed relief to the media and entertainment sector.

 

Uday Shankar is also CEO, Star India

 

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