Cable television network companies have threatened to go on a nationwide strike from August 17, blacking out all except the news channels.
The cable operators have demanded a withdrawal from the service tax net. The government had increased the service tax from 8 per cent to 10 per cent in the Union Budget and widened its net to include cable network companies, among other services. The government had earlier said that cable companies would not allowed to pass the hike on to consumers.
However, the decision to resort to a strike by the cable operators is surprising as the Telecom Regulatory Authority of India on August 13 said that operators and multi-system operators can hike charges in view of the increase in service tax and the imposition of education cess in Budget.
The TRAI said: "The government of India in the Finance Bill, 2004 has proposed to increase the service tax and levy an education cess. Since the rates of taxes are decided by the central and state governments, it would not be appropriate for the authority to put a ceiling on such charges," TRAI said.
But the operators seem adamant over the strike.
Finance Minister P Chidambaram's proposal to bring independent television programmers into the service tax net will also increase the operational cost for TV channels.
Earlier Virendra Gaur, president, Cable Operators United Front, had said: "We have certain concerns. The hike in service tax to 10 per cent and the widening of the tax net to include independent TV programme producers will have a negative impact on costs."
"An increase in electricity tariffs, new channels turning pay, sports channels increasing the rates and high inflation have necessitated an increase in the subscription rates," said Roop Sharma, president of the Cable Operators Federation of India.
