India MSOs hit with tax summons
September 2, 2013
It seemingly never just rains on India cable MSOs but it pours! Not only are they struggling with an analogue to digital conversion task that’s massively complicated and much delayed and has some regions now officially blacked out, but the tax-man has hit some Kolkata cable players with tax demands and claims of financial irregularities.
More than 350 operators, including major players and smaller Local Cable Operators, face claims for unpaid service taxes measured in the billions of Rupees. Tax investigators have raided some offices, dropping in without prior notice, and local reports suggest most have been given summonses alleging missing tax payments going back four years.
Although unconfirmed, reportedly one MSO paid up $3.7 million on the spot to officials.
Evidently the inspectors want paperwork going back 4 or 5 years. The regulations require a 12.36 per cent service tax to be paid for each set-top box installed.. India has long been notorious for its alleged under-reporting of paying subscribers, and perhaps the tax examinations are the natural follow-on of the digitisation process which – for the first time – is seeing genuine subscriber numbers emerge.