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Govt. to collect compounded tax from cable TV operators

By Our Special Correspondent

CHENNAI March 21. A compulsory compounding system of tax on cable TV operators in place of the existing connection-based tax levied by local bodies has been introduced in the Tamil Nadu budget in view of "underreporting" of connections by cable operators, resulting in a "very low" collection.

In the Assembly today, the Finance Minister, C.Ponnaiyan, said the tax would, henceforth, be levied and collected by the State Government. Local bodies would get a grant equivalent to their actual collection in 2002-03. A bill to amend the Tamil Nadu Entertainments Tax for this purpose would be introduced in the current session.

According to the budget proposal, the compounding rate per operator in a year would be Rs. 12,000 in village panchayats, Rs. 18,000 in town panchayats, Rs. 36,000 in municipalities and Rs. 72,000 in municipal corporations. The security deposit of Rs. 10,000 paid by operators would be reduced to Rs. 5,000 per operator in municipal corporations and municipal areas and Rs. 2,500 per operator in other areas.

"The power to levy and collect this tax will be transferred from local bodies to the Government. The local bodies will, however, be compensated by way of annual grants equivalent to their actual tax collections from cable TV in 2002-03", Mr Ponnaiyan said, adding that the Government expected to get an annual yield of Rs. 30 crores by this measure.

The Minister said, "There is large-scale underreporting of the number of cable TV connections with the operators".

"Local bodies have not been able to ensure that all connections are brought into the tax net. There have been practical problems in doing street survey to enumerate all connections. Consequently, the revenue collected by the local bodies has been very low."

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