The Telecom Regulatory Authority of India has lifted the freeze on cable distribution rates. This has been done to incorporate the 10 per cent service tax imposed on cable companies by Finance Minister P Chidambaram in the Budget.
Besides this the regulator has also allowed the cable companies to incorporate other local taxes in the cable Bill. The regulator had imposed a freeze on cable distribution rates in December last year. The ban was for the time till the government finalised its policy regarding the conditional access system.
Cable TV prices to go up
The new cable TV regime
Cable television network companies had threatened a black out of services in the four metros, as the government did not withdraw the 10 per cent service tax imposed on cable network companies.
The government has also increased the service tax on local cable operator from 8 per cent to 10 per cent. It was pointed out that while the government has decided to impose additional tax on the cable network companies, they are not able to pass on the increase in rates to consumers as the Trai order prevents them from hiking the cable subscription rates.
Operators pointed out that their cost has gone up in the recent months as the electricity charges have increased as well as channel costs due to channels turning pay. They also point out that the cable operators have not increased the rates in the last eight months despite the increase in cost of operations.
It was also pointed out that despite the government imposing an 8 per cent service tax, no cable subscriber is paying the tax separately and operators have been taking the entire burden.
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