SC's Dual Tax Ruling to Hurt Broadcasters, Consumers

A recent Supreme Court ruling allowing both central and state governments to impose separate taxes on direct-to-home and cable TV services has rattled India's broadcast sector, already reeling from shrinking margins and digital disruption.

- Lata Jha

NEW DELHI:

While the judgment technically applies to the pre-GST (goods and services tax) era, its implications are far-reaching. Broadcasters now face a potential wave of retrospective tax demands, and the verdict may set a precedent for state-level levies on digital streaming, gaming, and other online content platforms—currently outside such frameworks.

Industry insiders warn this could drive up compliance costs, hurt profitability, and accelerate market consolidation.

"The dual financial burden could affect the profitability and sustainability of broadcasting operations, particularly for indigenous players operating on thinner margins. Coupled with revenue constraints, broadcasters will pass this increased liability down the value chain to consumers," said Gaurav Sahay, founder partner, Arthashastra Legal.