After SITI Cable Network Limited, Induslnd Media and Communications, Hathway cable, Datacom and Den Networks have come under the ire of Delhi Government for evading entertainment tax during 2013-14 and 2014-15. The Government has issued notice to these Multi-system operators (MSO) for paying Rs. 243.77 crore as dues.
Few days before, SITI Cable Network Limited, an Essel Group Company too received a notice directing them to debit Rs. 33.12 crore as its outstanding entertainment tax for two years, along with the interest and penalty. The case was such that the MSO had collected tax from its 5,36,616 customers at a rate of Rs. 20 per month, but deposited only Rs. 4.63 crore as entertainment tax to Government during 2013-2014. A similar tax evasion was found in the following financial year too. SITI Cable denied any allegations in this regard.
TRAI also recently release framework for ‘commercial interoperability’ of CPEs . TRAI, which is the regulator for the broadcasting sector, also observed that there is a “lack of transparency” in various schemes offered by the DTH operators. Listing the salient features of the new order, TRAI said that it mandates transparent declaration of installation and activation charges by DTH operators which shall not exceed Rs 450.
Following the case with SITI Cable Network, officials began examining the records of other MSOs in the national capital, which revealed the tax evasion of Induslnd Media and Communications, Den Networks, Hathway cable and Datacom.
Sources reported that the Government had promised the MSOs that no action would be taken during the pendency of a case challenging the levy of entertainment tax and vires of the Delhi Entertainment and Betting Tax Act 1996 and the current action is a violation of this commitment.
Den Networks has to pay Rs 88.81 crore, while Hathway Cable and Datacom need to pay around Rs 59 crore. IndusInd Media and Communications has been asked to pay nearly Rs 52 crore for two years.
