Cable operators push for tax reduction amid OTT pressure

New Delhi: The All India Digital Cable Federation (AIDCF) has asked the government to reduce the Goods and Services Tax (GST) on cable television services from 18% to 5%.

The federation has written separately to Finance Minister Nirmala Sitharaman and Information and Broadcasting Minister Ashwini Vaishnaw, urging that the matter be taken up in the forthcoming GST Council deliberations.

According to AIDCF, cable television continues to reach over 6.4 crore households across the country and supports an estimated 10 to 12 lakh livelihoods. The sector is made up of 852 Multi System Operators (MSOs) and nearly 1.6 lakh Local Cable Operators (LCOs), many of whom operate as small businesses at the district and village level.

The federation said the industry has been under strain due to multiple factors. It pointed to shifts in viewing patterns over the last five to six years as over-the-top (OTT) platforms gained popularity.

While cable operators are regulated by the Telecom Regulatory Authority of India (TRAI), the federation said OTT services have taken advantage of regulatory ambiguity, creating uneven conditions for competition.

The submission also highlighted rising costs of distribution. It stated that broadcaster channel prices have increased sharply, in some cases by up to 600%, leading to monthly subscription bills for consumers rising by about 35–40%.

The federation said this has reduced affordability for households and squeezed margins for operators.

Commenting on the matter, Manoj P. Chhangani, Secretary General, AIDCF, said, “Families in small towns and rural areas gather around it as a shared medium of education, information and culture. A rationalisation of GST to 5% will not only ease the burden on consumers but also preserve lakhs of livelihoods and safeguard an industry that has been instrumental in bridging the digital divide.”

In its appeal, AIDCF set out a series of reasons why a lower GST rate would be beneficial.
It said the move would contain further increases in monthly bills, which have already risen due to higher content prices.

It added that reducing the tax burden would ease working capital requirements for MSOs and LCOs, many of whom are categorised as micro, small and medium enterprises (MSMEs).

According to the federation, this would allow operators to use more resources for network upgrades, including the expansion of wired broadband services.

Another argument presented by the federation was that lowering GST could help stabilise subscriber numbers by making the service more affordable and reducing churn. It said this would provide a measure of relief to operators at risk of closure while helping sustain thousands of small enterprises across the country.

AIDCF noted that placing cable services in the 5% GST slab would provide greater parity with other competing platforms. It noted that some platforms already benefit from subsidies or operate outside the current fiscal and regulatory framework.