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Presentation on

Taxation on DTH industry

Presented By..

Rajasekar (554)

Ravisankar (582)

Revathy c (586)Rijutha Ramesh (587)

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Welcomes U All in theWorld Of DTHIndustry

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WAR IN SKY

DIRECT

TOHOME

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What Is DTH?

DTH stands forDirect-To-Home television.

A wireless digital audio / video service is delivered throughsatellite.

Terms Related to DTH Service.

Digital Decoder (commonly known as set top box)

. Viewing Card.

DTH operator.4/26/2011

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Entertainmenttax on DTH services

For the first time, the Gujarat government has proposed to levy an

entertainment tax on Direct to Home (DTH) services available on

television connections across the state. The proposed tax is Rs 200 per

connection on an annual basis.

Presenting the modified budgetary estimates for 2009-10 in the House

on Tuesday, Finance Minister Vajubhai Vala said, At present,

entertainment tax is being levied on cable TV, which is a source of

entertainment for the poor and middle class people in urban as well as

rural areas who pay this tax for the same.

But no tax is levied on DTH services, which are generally used by the

well-to-do people.

This leads to injustice to the poor and middle class people, and also

creates avoidable imbalance in the society. A large number ofrepresentations have been received (by the government) from cable TV

operators regarding the lack of a level playing field. Considering all

these factors, I propose to levy entertainment tax on DTH facility, Vala

told the House.

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PLAYERS IN D.T.H

DISH T.V

TATA SKY

BIG T.V

SUN DIRECT

D.D. DIRECT

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Rs 16000-croreregional Tamillanguage Indian cabletelevision

networkbased in Chennai,Tamilnadu

Established in 1993

DTH service started on 7th December,2007

Offers 20 television channels in fourlanguages,generallytargeting

southern Indian viewers

80:20 jointventure between the Karunanidhi Maran familyand the

Astro Group of Malaysia

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First oneto adopttheadvanced MPEG4

technology

Bettercompression and signal quality

First onereadyto offer HD TV ( High

definition ) content

DVD qualityentertainmentatan affordable

price

Supported by Irdeto's conditionalaccess

solution

Channels in otherlanguages also

Large footprint/coverage

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1.4 million subscribers in

south India makingitthe

largestand mostpopular

DTH serviceproviderin

south India

Expectto reach 3 million

plus subscribers in the

southern region bytheendofthis fiscal

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Tax on Sun direct DTH

Sales Tax

Income Tax

Entertainment Tax

Luxury Tax

Service Tax


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Sales Tax

Asales tax is a consumption tax charged at the point of purchase for

certain goods and services. The tax amount is usually calculated by

applying a percentage rate to the taxable price of a sale. A portion of

the sale may be exempt from the calculation of tax, because sales tax

laws usually contain a list of exemptions. Laws governing the tax may

require it to be included in the price (tax-inclusive) or added to the price

at the point of sale.

Most sales taxes are collected from the buyer by the seller, who remits

the tax to a government agency. Sales taxes are commonly charged onsales of goods, but many sales taxes are also charged on sales of

services. Ideally, a sales tax would have a high compliance rate, be

difficult to avoid, and be simple to calculate and collect.

SUN DIRECT DTH 4 or 12 % of sales tax depending upon sales in

regions


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Income Tax

An income tax is a tax levied on the income of individuals orbusinesses (corporations or other legal entities). Various income tax

systems exist, with varying degrees of tax incidence. Income

taxation can be progressive, proportional, or regressive. When the

tax is levied on the income of companies, it is often called a

corporate tax, corporate income tax, or profit tax. Individual income

taxes often tax the total income of the individual (with somedeductions permitted), while corporate income taxes often tax net

income (the difference between gross receipts, expenses, and

additional write-offs). Various systems define income differently, and

often allow notional reductions of income (such as a reduction based

on number of children supported).

SUN DIRECT DTH 32% of income tax based on profit


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Entertainment Tax

In India, movie tickets, large commercial shows and large private festival celebrations

may incur an entertainment tax.

Entertainment falls in List 2 of the Seventh Schedule of the Constitution of India and

is exclusively reserved as a revenue source for the state governments. Historically,

before India acquired independence British government imposed heavy taxes on the

events of amusements and entertainment, where a large gathering of Indians could

have caused rebellion or mutiny. Thus, various entertainment tax acts of the state

governments permit the rate of tax beyond100%. After independence, old enactments

continued and there has been no revision or repeal of these acts.

This source of revenue has grown with the advent of Pay Television Services in India.

Since, entertainment is being provided through the services such as Broadcasting

Services, DTH Services, Pay TV Services, Cable Services, etc. The component of

entertainment is intrinsicially intertwined in the transaction of service, that it can not

be separated from the whole transaction. Given the nature of transaction of service, it

is being subjected to tax by the Union and the State governments both.

The fiscal principle underlying article 246 of the constitution of India separates the

sources of taxation for the Union and the States and also maintains the exclusivity.This article also provides that in case of conflict between the powers of Union and the

States, the Union power to tax shall supersede the power of the State to levy tax on

the taxable event or in relation to the subject or object of taxation.

The entertainment Industry in India is facing the challenge of double taxation on such

transactions.

SUN DIRECT DTH 10 or 25 % of entertainment tax on other states except tamilnadu


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Luxury Tax

Aluxury tax is a tax on luxury goods -- products not considered essential.A luxury tax may be modeled after a sales tax orVAT, charged as a

percentage on all items of particular classes, except that it mainly affects

the wealthy because the wealthy are the most likely to buy luxuries such as

expensive cars, jewelry, etc. It may also be applied only to purchases over

a certain amount; for instance, some U.S. states charge luxury tax on real

estate transactions over a limit.A luxury good may be a Veblen good, which is a type of good for which

demand increases as price increases. Therefore the effect of a luxury tax

may be to increase demand for certain luxury goods. In general, however,

since a luxury good has a high income elasticity of demand by definition,

both the income effect and substitution effect will decrease demand sharply

as the tax risesSUN DIRECT DTH 2% of luxury tax only in kerala


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Service TaxService Tax was introduced in India in 1994 by Chapter V of the Finance Act,

1994. The Central Board of Excise & Customs (CBEC), Department of

Revenue, Ministry of Finance, deals with the task of formulation of policy

concerning levy and collection of Service Tax. The CBEC is assisted by the

Directorate of Service Tax located at Mumbai. The Service Tax is being

administered by various Central Excise Commissionerate spread across the

country. The jurisdiction of each Commissionerate has been specified vide

Notf. No. 14/2002-CE(NT) as amended from time to time. However there are

six Commissionerates located at metropolitan cities of Delhi, Mumbai, Kolkata,

Chennai,Ahmedabad and Bangalore which deal exclusively with work related

to Service Tax. These Commissionerates are supervised by the jurisdictional

Chief Commissionerate of Central Excise. Each Commissionerate consists of

3 to 5 divisions with each division consisting of a number of range offices.

SUN DIRECT DTH 10.3% of service tax in DTH services


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Octroi taxes have a respectable antiquity, being known in Roman timesas vectigalia. These vectigalia were either the portorium, a tax on the

entry from or departure to the provinces (those cities which were

allowed to levy the portorium shared the profits with the public

treasury); the ansarium orforicarium, a duty levied at the entrance to

towns; or the edulia, sale imports levied in markets. Vectigalia were

levied on wine and certain articles of food, but it was seldom that thecities were allowed to use the whole of the profits of the taxes.

Vectigaliawere introduced into Gaul by the Romans, and remained

after the invasion by the Franks, under the name oftonlieuxand

coutumes.

SUN DIRECT DTH it is not expressed in percentage it is the amonut

that varies from place to place


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DTH: A flourishing

Industry in India

The DTH market today is less than 5% ofthe total TV market.

Populated by 4 players

Expected players

6 million DTH market double withreliance entry.

Players reach

New DTH brand

India's pay TV market 137mn -2012

DTH subscribers base-38mn-2012

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Strengths ForFuture

High growth chances.

Foreign technology.

Standard product.

Active news, active cooking, active

learning.

Language option.

Bargaining prices

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