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Entertainment, media set to get cheaper

The FM removes the import duty of 7.5 per cent on specific components that are used in set top boxes, reports Ruchi Hajela.
Hindustan Times | By Ruchi Hajela, New Delhi
UPDATED ON MAR 01, 2008 03:13 AM IST

Watching cable TV via direct-to-home television services is bound to get cheaper.

The Finance Minister has removed the import duty of 7.5 per cent on specific components that are used in set top boxes. As it is, there is no import duty on set-top boxes.

“This will provide an opportunity for DTH players to evaluate the option of manufacturing set top boxes locally,” Jawahar Goel, MD, Dish TV said in a statement.

Not just that. Even renting out a set top box may get cheaper as the value-added tax (VAT) that was so far applicable in addition to the service tax has now been waved off.

Other than that, wireless data cards are also set to get cheaper by 16 per cent as the excise duty has now been brought down to zero percent.

The data card that till now cost you anywhere between Rs 4,000 to Rs 5000 will be cheaper by six hundred to hundred rupees. Customs duty on “convergence products” that aid digital media have been brought to five per cent from 10 per cent.

Talking about the IT industry, Finance Minister P Chidambaram announced that the annual allotment to the Department of Information Technology would be increased from Rs 1500 crore to Rs 1680 crore. In addition, the FM has proposed to set up 100,000 broadband rural kiosks, statewide area network and state data centres.

Other than that, he promised to provide Rs 100 crore to the Ministry of Information & Technology to set up National Knowledge Network. According to consulting firm Frost & Sullivan, this would directly benefit the telecom sector.

“Looking at the potential this is miniscule, but it would lead to huge opportunity in mid-to-long term (3 to 5 years),” said Sourabh Kaushal, Industry Manager, Frost & Sullivan, South Asia and Middle East.

Also, an increased annual spend on education and healthcare sectors would indirectly benefit the IT hardware and telecom industry, says Kaushal.

His view is reiterated by Vinnie Mehta, Executive Director, Manufacturers Association of Information Technology (MAIT), who said, “The focus given on education and skill development is indeed very welcome as this would be integral to sustain the competitiveness of the entire IT sector in the long run.”

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