July 2017


GST has now been ushered in, introducing radical but welcome changes in how tax is administered. All Indian citizens will now be subject to the same level of GST unlike earlier where certain states offered significantly lower taxes than others. All businesses will effectively pay tax only on their "Value Added" component. The tax buck will finally stop at the end consumer. Hence from a manufacturing tax regime, GST shifts to a consumption tax system. States with larger consumption will net larger tax revenues. The transition to GST is difficult for most businesses but hopefully within a couple of months, the dust should settle. Cable TV subscribers, LCOs and MSOs stand to gain substantially from the 18% GST on cable TV subscriptions since it subsumes both Service Tax and Entertainment Tax.

Even as we go to print, the Madras High Court is hearing Star India's case that not only challenges the new tariff order but also the powers of the TRAI to regulate broadcasters' tariffs. Star has employed a large team of prominent lawyers, on an unprecedented scale. They include Ex Finance Minister P Chidambaram, Abhishek Manu Singhvi and Amit Sibal. The verdict will have such far reaching consequences that it will almost certainly be challenged in the Supreme Court. Details should be available in our next issue.

OTT is widely gaining traction and currently remains unregulated, providing uncensored and even free content which is otherwise sold via pay channels. This has created concern amongst distribution platforms and Videocon d2h has expressed its concern to the TRAI. We include a report, this month.

Interestingly Videocon is to be merged with DishTV which offers an OTT platform! Of course, we remain perplexed how the CCI has approved the Videocon d2h merger with DishTV which clearly violates the TRAI's recommendations that market cap of the merged entity should not exceed 33%.