The Kerala High Court has set aside the levy of luxury tax on direct-to-home (DTH) operators. In an order, the Kerala HC has said that any luxury tax levied on DTH operators from April 1, 2011 shall be refunded, said a press statement issued by Dish TV, Asia’s largest DTH service provider.
It should be noted that the six-player private DTH industry attracts both entertainment tax (at state level) and the service tax (at central level) along with a 10 per cent licence fees.
Welcoming the order, DishTV said in a press statement: "We welcome the Hon’ble Kerala High Court’s order to set aside the levy of Luxury Tax on DTH." Rajeev Dalmia, chief financial officer, Dish TV added: "While setting aside the levy, the Hon’ble High Court of Kerala has further directed that luxury tax, if any, paid by the petitioners during the period from 1/4/2011 shall be refunded to them."
Dish TV said it hoped that with the Hon’ble Kerala High Court judgement setting the trend, the tax regime for the DTH industry should hopefully be rational going forward.
Kerala & Luxury Tax issueIn August 2012, a division bench of the Kerala High Court had set aside the government decision to levy luxury tax on cable TV operators with a subscriber base of 7,500 connections and above holding it unconstitutional and discriminatory.
According to the petitioners back then, luxury tax of Rs 5 per connection on operators had been introduced in April 2006 by amending the Kerala Tax Luxury Tax Act. However, the government had exempted cable operators with less than 7,500 connections from the luxury tax in 2011 with retrospective effect. The petitioners contended that the operators with 7,500 and above connections had been discriminated against and that the decision was violative of Article 14 of the Constitution (equality before law). Besides, no luxury tax had been levied on the DTH providers, the petitioners had contended
They said that service provided by them did not come under the definition of luxury. The State government contended that the classification was reasonable. The court said that there was no reasonable classification between the operators. The court had pointed out that the Supreme Court had held that tax should be levied without discrimination. The court had observed that that the decision had violated Article 14 of the Constitution.
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
