Amid Information & Broadcasting Ministry's plans to spread digitisation across the country, Finance Minister P Chidambaram today doubled the customs duty on set top boxes (STBs) from the current 5 per cent with an aim to protect the domestic industry.
"To encourage domestic production of set top boxes as well as value addition, I propose to increase the duty from 5 per cent to 10 per cent," Chidambaram said in his budget speech while referring to indirect taxes.
The step could have a significant implication as the government's digitisation drive, which aims to usher in complete digitisation of the cable sector across the country by December 2014, has created a huge demand for STBs.
However, it is foreign manufacturers, especially those from China and Taiwan that have been at the forefront to meet this demand.
According to estimates by the I&B ministry, over a crore STBs have been installed in the country following the decision to implement digitisation.
Following the completion of phase I of digitisation where cities of Delhi, Mumbai and Kolkata were digitised (the matter is sub-judice in Chennai), the ministry has moved on to phase II for which STBs have to be installed in 38 cities.
The I&B ministry has been considering measures to increase the share of indigenous manufacturers of STBs in this country wide demand.
