In a major move to encourage domestic production of set-top boxes (STBs), the Indian government has declared these as telecom network equipment. This is likely to help domestic manufacturers produce STBs at more competitive prices by availing tax exemptions, extended to the manufacturers of telecom equipment in the country
Currently, there exist Indian manufacturers who produce high-quality STBs, however, most of these are exported to other countries such as US. The government is now making efforts to encourage them to produce for domestic consumption.
The government?s plan to digitise cable services in India by the end-2014 will require installation of STBs in cable TV homes. While most of the STBs used during the first two phases of digitisation were imported, the government hopes that its current move will help in making STBs indigenously available. It has been estimated that the third and fourth phases of digitisation, will require installation of about for 110 million- 120 million STBs.
Classifying STBs as telecom equipment will help enable indigenous manufacturing sector to avail the benefit of tax exemptions by bringing down value-added tax (VAT) from current 12 per cent to 14 per cent to 4 per cent.
