The government announced on Friday a concessional customs duty of 5 per cent, under Project Import, for the cable TV operators for importing head-end equipment.
Finance Minister Pranab Mukherjee, in his Budget speech, said cable transmission of entertainment was undergoing a transformation with the adoption of digital technology and that multi-service operators were keen on investing in digital headend equipments.
The Union Budget 2010-11 has proposed to provide 'project import status' at a concessional customs duty of five per cent to the initial setting up of projects where multi-service operators need to invest in digital headend equipment.
There would also be full exemption from special additional duty to the initial setting up of import projects.
However, Cable Operators Federation of India (COFI), a representative body of the cable operators said, the move would only help large operators.
"Project Import is a cumbersome process involving the requirement of taking a recommendatory letter from an administrative ministry which is I&B Ministry, then registering the total project import which means again documentation with customs department and giving a provisional duty band to customs with a bank guarantee," COFI President Roop Sharma said.
At least, the government should have reduced the duty on cable TV equipment to 5 per cent in general without precondition of Project Import, she added.
Mukherjee also announced a rationalisation in the customs duty structure for import of raw stock by charging customs duty only on the carrier medium to remove the differential rates between importing digital masters of films and cinematograph film.
The same would apply to music and gaming software imported for duplication, he added.
However, "in all such cases the value representing the transfer of intellectual rights would be subjected to service tax," he added.
"This should help the distribution of games from global gaming companies such as EA into the Indian markets. This would lead to increased number of global offerings and a pick-up in demand," Nazara Technologies CEO Nitish Mittersain said.
Source : Business Standard