Scatmag.com

September 2019

DISH DOCTOR
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GST COMPOSITION SCHEME (6% ONLY) - GOOD FOR MSOS ?

Q: We are an MSO, and are considering paying GST under the composition scheme.

Please provide some clarity on this so that we can start paying GST composition tax.

Yatish, Karnataka, Via WhatsApp

ANS: The GST Composition scheme is to provide ease of accounting to small manufacturers, traders & service providers, so that they are not burdened with elaborate maintenance of records required for normal GST filing. It is applicable only if your annual turnover is upto ₹ 1.5 Crore. Service providers must pay 6% tax under the GST composition scheme (a separate circular was to be issued by the government to extend the composition scheme to service providers. It is not clear if this circular has now been issued).

To summarise:

  1. The GST composition scheme is permitted only if your annual turnover is upto ₹ 1.5 Crores i.e. less than ₹ 12.5 lakhs per month. Most medium sized MSOs will have a turnover above this.
  2. We suggest that you should not opt for the composition scheme for the following reasons:
    • You cannot claim input tax credit. Hence you cannot claim the GST that you are charged by Pay Channel broadcasters, or your equipment suppliers.
    • You cannot claim any GST amount from your LCOs or direct customers.

Do work out the details for yourself, based on the above, before taking a decision. Even if your annual turnover is below 1.5 Crore, the composition scheme may work out more expensive for you, since you cannot claim any input tax credit.



BROADBAND/ANDROID STBS ILLEGAL?

Q: Can we get "Authorised Broadband STBs" ?

Are they available in the market?

Recently there was news that police arrested some persons in New Delhi for selling Broadband STBs. Please clarify.

G Parmeshwaram, Chennai

ANS: Almost all Android STBs can connect to the internet over Wi-Fi, and provide HD and even 4K resolution content to the connected TV set. (The TV set must be 4K capable to actually display video with 4K resolution).

Android STBs are legal.

I am reproducing below the report that you refer to:


NOIDA: POLICE SIEZE 'NET STBS

According to press reports, the Noida police raided "4 Muskman Electronics Pvt Ltd" & seized 70,000 broadband TV STBs. Two persons including the Director - a Chinese national were arrested.

These STBs were capable of receiving pirated Indian & international TV channels broadcast over the internet.

The STBs were sold in cash.

The arrested persons have been charged with piracy, importing the STBs as 'computer parts' & for GST evasion, since sales were in cash without GST. Also, no MRP was printed on the STBs, as required by law.


The police arrested the persons not simply because they had Android STBs, but because of the following:

  1. The Android STBs were loaded with Pirate Apps that provide free live channels from all over the world. (These pre loaded apps made the STBs illegal. The Android STBs by themselves are Not illegal.
  2. The STBs were sold in cash, without GST.
  3. No MRP was printed on the items, as required by law for sale of all items to consumers.

Dish Doctor
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