UP mulls entertainment tax for DTH

Increase in the number of direct-to-home (DTH) connections has given Uttar Pradesh a way to increase its entertainment tax revenue.

The entertainment tax department of the UP government has proposed a separate clause in its Entertainment Tax Act, 1989, under which DTH operators such as Tata Sky and Dish TV would have to pay tax per connection. Though a matter regarding this is pending in the High Court both these companies have been paying such tax in Lucknow.

According to the UP entertainment tax department, there are 1.25 lakh Tata Sky connections in the state, while its rival Dish TV has 1.75 lakh connections. Both these companies add at least 10,000 consumers per month, shows the survey conducted by the entertainment tax department.

According to the Entertainment Tax Commissioner of UP, Ramendra Tripathi, the department receives only Rs 30 per connection from Tata Sky and Dish TV consumers from Lucknow city. Both these companies have shown 10,000 connections in Lucknow.

"We want to bring Tata Sky and Dish TV in the ambit of entertainment tax with a spate mention of them," said the entertainment tax commissioner, while talking to Business Standard. He said that the growth in number of cable connection is decreasing due to DTH services. In the financial year, 2007-08, number of cable connections grew only by 10 per cent, informed Tripathi.

The Deputy Commissioner, Entertainment Tax, VK Srivastava, when approached by Business Standard said that the department has proposed change in the section 2(G) of the UP Entertainment Tax Act. The proposal would now go to the state cabinet for approval.

The entertainment tax department has proposed a flat rate of 30 per cent tax on the DTH operators. If the act comes into force with the same number of DTH connection about which data is available with the department, the entertainment tax would increase to around 25 crore.

"DTH operators are in the ambit of general entertainment, which would change after the state cabinet gives its nod to the proposal," said Srivastava. He said that very soon the cases of Dish TV and Tata Sky pending in the courts would be cleared.