New Delhi, May 29: The government today slashed import duty on set-top boxes, which will be required from July 14 to view pay channels on television, from 50 per cent to 5 per cent for a limited period till July 31.
Prices of upper-end set-top boxes — currently around Rs 5,000 — are expected to fall sharply to about Rs 3,000 after the duty cut, industry sources said. The decision is being seen as a huge relief for television viewers who were worried about the introduction of the conditional access system (CAS) and the impact it would have on their wallets.
The set-top boxes will be needed to access pay channels under the conditional access system being introduced in the four metros. These devices use a technology that allows viewers to watch only those pay channels that they want to subscribe to.
A finance ministry notification said the set-top boxes will attract only 5 per cent basic customs duty from May 28 to July 31. Earlier, importers had to pay 25 per cent basic customs duty, 16 per cent countervailing duty and 5 per cent special additional duty which together worked out to around 50 per cent.
The notification said the government would revert to the earlier duty structure from August 1. The high cost of set-top boxes had raised questions about their viability with political parties debating the issue at length.
Local manufacturers of set-top boxes, predictably, are unhappy with the move. Sarabjit Singh from Daenyx International said: “I am very upset and in a complete fix due to this customs duty reduction. In the last six months, we had made lot of investment... all the time, effort and money will go entirely waste.”
Athar Abbas from Cat Vision, another manufacturer of set-top boxes, said: “It’s not viable to manufacture in India with a shield of just 5 per cent customs duty. In the period from May 28 to July 31, it will be better to import boxes as they will be cheaper.”
The plan to bring in the devices met with resistance from several members of the parliamentary standing committee on information technology and communications, which met under the chairmanship of CPM leader Somnath Chatterjee. Members cutting across party lines expressed reservations about the July 15 deadline for implementation of the conditional access system.
The Congress and the Left parties suggested that the system be deferred. The BJP also expressed apprehensions about consumer response to the conditional access system.
Reacting to today’s controversy, information and broadcasting minister Ravi Shankar Prasad said: “I appeal to all stakeholders in CAS to focus on consumer interest. The government will take appropriate legal measures if needed.”
Prasad said the government was monitoring progress on implementation of the system on a day-to-day basis and working on “additional measures” to protect consumer interest. The pricing of pay channels will have to be such that a bouquet does not cost less than any single channel, he added.