Navjot Singh Sidhu’s tax plan gets Cabinet nod: Fastway will have to pay Rs 2 per connection

After the Cabinet meet, Sidhu told The Indian Express Monday that the state was bound to lose revenue of nearly Rs 5 crore as earlier they were making Rs 52 crore and now the receipts would amount to Rs 47 crore. (File photo)

PUNJAB’S LOCAL Bodies Minister Navjot Singh Sidhu dealt a ‘blow’ to local cable network companies Monday, when the Punjab Cabinet gave its nod to his proposal to reduce tax on Direct to Home (DTH) connections and levied a nominal tax on local cable connections. The state will now levy only Rs 5 per month as tax on each DTH connection. It was earlier at 10 per cent per connection and there was no tax on local cable connections. Each local cable operator would be levied a nominal Rs 2 per connection and each consumer would be levied a tax of Rs 5 each.

With Monday’s development, DTH operators will now have a level playing field thereby giving competition in the open market to local cable networks. Sidhu has been alleging tax evasions by Fastway Network Private Limited that is linked to the Badals, saying it was “monopolising” the cable network trrade in Punjab. The firm has denied the allegations in the past.

The agenda of entertainment tax was listed during the day, a few hours before the cabinet meeting Monday. After the Cabinet meet, Sidhu told The Indian Express Monday that the state was bound to lose revenue of nearly Rs 5 crore as earlier they were making Rs 52 crore and now the receipts would amount to Rs 47 crore. “But the motive was to have a law that has the teeth to bite. We will make cable operators accountable as levy of Rs 2 as tax would ensure that each connection is accounted for.” There are nearly 16 lakh DTH and 44 lakh cable connections in the state. The new tax is likely to mop up Rs.9.60 crore and 36.96 crore respectively from the two segments.

He added that the next step would be to provide TV connections through the Internet. Cable operators were charging Rs 300-400 from every consumer. With Internet, there will be a small box set up with every TV set and it will not cost more than Rs 150-200. This would also mean that the state would have the exact number of consumers.” In the past, Sidhu had proposed to levy a tax of Rs 50 each on all cable connections in the state. His proposal was turned down following resistance from within. Chief Minister Amarinder Singh had asked Sidhu several times to work on the policy. There were also concerns about the new government levying taxes soon after coming to power. It did not suit the government politically.

With cable tax now at Rs 5 per month for consumer, the nominal amount will not pinch anyone. Sidhu said a notification would be issued after the next Vidhan Sabha session as The Punjab Entertainments & Amusements Taxes (Levy & Collection by Local Bodies) Act 2017, will replace the earlier entertainment tax system under the new GST regime. With the new tax structure in place, the government will be able to ask them to disclose details of their connections, which they have so far been prone to hiding in order to evade tax.

The move follows a proposal mooted by the local government department, allowing all the urban local bodies and gram panchayats to levy such tax. However, no entertainment tax has been proposed for cinemas, multiplexes, amusement parks and similar other places providing facilities for entertainment and amusements.