New Delhi, Sept. 26: National broadcasters Doordarshan and All India Radio may have to pay up crores if a sales tax notice issued by the New Delhi administration on them is held legally valid.
The notice was served a few weeks ago but Doordarshan has now appealed against its validity. Delhi High Court has set October 9 for hearing.
Sources in the Delhi commercial taxes administration said that since Doordarshan was selling time on its channels, it was a business transaction that ought to attract sales tax.
“This is not something out of the ordinary that we have done. Every organisation that is in the business of selling something has to pay sales tax. Even government departments do it. Why should Doordarshan be treated as an exception'” they asked.
The notice served by the Delhi administration does not quantify the amount payable by Doordarshan. “They are only saying we are liable to pay sales tax. First they expect us to agree on the principle,” a Doordarshan official said.
Sources said the sales tax notice asked why Doordarshan was not paying up for the last five years. The Doordarshan official agreed that if the notice were to be held valid, it is possible Prasar Bharati will also have to pay up an amount running into crores.
However, Doordarshan has appealed against the notice. Its plea is that Prasar Bharati — Doordarshan’s holding corporation — is already paying service tax on its business to the Central government and it cannot be taxed twice for a single business.
Besides, Doordarshan also argues that Central (service) tax takes precedence over state (sales) tax and Doordarshan is a “public service broadcaster”.
Doordarshan is also arguing that “strictly speaking we are not ‘selling’ time”. The official said: “We are like a taxi driver giving a ride to a passenger. The passenger pays for the ride and it does not mean that the taxi driver is selling his vehicle for the time in which the passenger occupies it.”
Doordarshan argues that advertisers pay it for the time-slots to air their commercials and this does not tantamount to selling Doordarshan’s airtime to them.
The official said Doordarshan had not yet undertaken an exercise to determine the quantum of sales tax payable on the commercial time that it has sold.
“For the moment, we have got a stay order and another hearing is due next month,” he said.