EXPECTED BUDGET IMPACT: Positive
LONG TERM OUTLOOK: Positive
The media sector has, in the past, made several demands for tax sops on imported equipment needed for digitization (mainly set-top box). The industry holds the belief that DAS implementation shall provide a long-term benefit to the government (service tax collections), and the industry should be provided temporary benefits in terms of funding. However, prior inaction of the government, especially in FY13 budget that preceded DAS deadline in several cities (official deadline for Phase 2 cities is also March 31st), indicates that the government believes that the sector can manage its own funding. We believe that higher foreign limits allowed in the cable distribution sector do provide companies access to outside capital, and are likely to be deemed to suffice, for now. Therefore, we expect that demands for lower customs duty/ grant of infrastructure status to the industry shall not be met.
Broadcasters have, for long, been demanding that service tax applicable on advertising in the sector be removed (for parity with print publishers). DTH service providers have similarly been asking for a rationalization of taxes (incidence of state-wise entertainment taxes to be reviewed). We believe that these demands shall not be met in this budget. However, there is a possibility of the multiple taxes on DTH to be subsumed into GST. Insights into these matters are unlikely to be available at the point of presentation of the budget.