FM radio sector wants customs duty waiver

RUN-UP TO THE BUDGET

The FM radio sector, in its pre-Budget memorandum to the finance ministry, plans to seek

Customs duty waiver and service tax holiday for five years.

The sector is witnessing a boom with 300-odd FM stations set to hit the airwaves by August this year.

"The industry is in the process of setting up FM stations all over India and needs to import equipment worth Rs 500 crore.

We have to pay Customs duty of up to 38 per cent on hardware and 20 per cent on software," an official of the Association of Radio Operators of India, an FM radio industry body, said.

Bharat Electronics is the only Indian player that makes FM radio transmitters, but the companies find its products too expensive.

"We plan to seek waiver of the Customs duty and service tax exemption for second and third phases of FM radio expansion," a top executive with an FM radio company said.

The industry moved from a licence fee regime to a revenue-sharing regime in 2006.

During the licence-fee regimes""2002-03 and 2003-04""the industry suffered a loss of Rs 118 crore and Rs 122 crore, respectively.

The companies spent close to Rs 1200 crore for acquire and retaining licences. Conservative estimates point to an investment of Rs 1,000 crore for the rollout of the planned FM channels.