Watching cable and satellite TV may turn expensive with the government proposing to double import duty on set top boxes (STBs) to 10 per cent but domestic manufacturers have welcomed the move.
Reacting to Finance Minister P Chidambaram's announcement to hike import duty on STBs from the existing 5 per cent, DTH Operators Association of India President Harit Nagpal said "the increase seems out of place".
"The DTH industry is already paying 32 per cent of its revenue as taxes. At a time like this, when the government's digitization mandate is entering its second phase, the industry requirement is many times over normal and there is no local manufacturer of repute who can deliver quality boxes in such quantities," Mr Nagpal added, who is also Tata Sky MD & CEO.
The move may push up set top box prices by about Rs 50-60. Industry body FICCI expressed "shock" at the proposal saying the increase would be "detrimental" to the government's digitalisation programme.
"This sharp increase in import duty would escalate the costs for consumers and can potentially derail the digitalisation process," FICCI Chairman (media and entertainment committee) Uday Shankar said.
"At a time when the industry needs help, the government has actually increased the duty, which will increase the cost of the box," Dish TV chief operating officer Salil Kapoor said.
He added that the company is studying the impact of the hike and may have to pass on the additional burden to the end consumer.
Den Networks chief operating officer MG Azhar, however, welcomed the step taken by the government. "The increase will result in a nominal hike of Rs 50-60 per box. The move will spur benefits for the domestic manufacturing in the medium term, helping the overall industry," Mr Azhar added.