TRAI releases consultation paper on License Fee and Policy matters of DTH Services

The Telecom Regulatory Authority of India (TRAI) under the Ministry of Communications has  released a Consultation Paper on ‘License Fee and Policy matters of DTH Services’.

It has also invited written comments on the consultation paper from all stakeholders by February 13, 2023 and counter comments, if any, by February 27, 2023.

The ‘License fee’ is a non-tax fee levied on a service provider against the privilege of being permitted to carry out a licensed activity.

In India, currently, the DTH operators are required to pay a license fee of 8% of Adjusted Gross Revenue (AGR) on a quarterly basis to Ministry of Information and Broadcasting (MIB), where AGR is calculated by excluding Good and Services Tax (GST) from Gross Revenue (GR).

Earlier, in October last year, the Department of Telecommunications (DoT), had carried out amendments in the Unified License (UL) Agreement for AGR wherein Applicable Gross Revenue (ApGR) shall be equal to GR of the licensee by reducing certain revenue components as mentioned in the amendment.

Further, the definition of AGR is also amended and shall be arrived at by excluding some components from ApGR.

The extant DTH guidelines prescribe a Bank Guarantee (BG) for an amount of Rs 5 crores for the first two quarters, and thereafter, for an amount equivalent to License fee for two quarters and other dues not otherwise securitized.

DoT has also carried out certain amendments for rationalization of BGs on October 6, 2021.

In view of the aforesaid amendments carried out by DoT, and on the request of DTH association and DTH operators, MIB had sent a reference to TRAI on February 2, 2022, requesting TRAI to examine the following issues from policy angle and furnish its recommendations under section 11(1)(a) of the TRAI Act, 1997:

• Issue of exclusion of non-licensed activities from definition of Gross Revenue in respect of DTH License fee as in case of recent amendments carried out by Department of Telecommunications (DoT) and/or identify any other base for levy of the license fee. Accordingly, the format of Form-D in DTH sector as per GR/AGR criteria may also be provided;
• Percentage/amount of Bank Guarantees (BGs) in respect of private DTH services as in case of recent amendments carried out by Department of Telecommunications (DOT); and
• Issue of Uniform License Fee (Level playing field) in respect of all Distribution Platform Operators (DPOs).

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