MUMBAI, Sept 18: Defeated by administrative and legal loopholes in the collection of entertainment duty from cable operators, the government is considering auctioning of rights to private parties to recover the revenue and also impose a tax on pay channels.The government has been forced to take this decision because of the measely Rs 15 crore revenue it gets every year from cable operators. The government believes that cable operators cheat it of its legal dues by under-declaring the number of cable connections.The government levies a tax of Rs 30 per cable connection. While the cable operators insist that there are only about 12 lakh cable connections in the state, the government believes that in Mumbai alone the figures should be in multiples of that. In fact, when the cable operators went on a two-day strike last month protesting against the doubling of tax (from Rs 15 per connection to Rs 30), the government had said it was forced to do so because of the dishonesty of the operators.According to figures given by the cable operators, in 1993-94, there were 5320 cable operators and 24494 cable connections. In 1999-2000, there were 14345 cable operators and 10.53 lakh connections. This went up to 15960 cable operators and 12.68 lakh connections by the end of July 2000. Going by the July 2000 figures (15960 operators and 12.68 lakh connections), it would mean there are only about 80 connections for every operator. A ridiculously low figure. That is why, the government believes, it earns only Rs 15 crore in revenue instead of Rs 45 crore.Since it would mean an enourmous strain on the government machinery to collect the duty, the government is planning to give it out to private parties. This way the government hopes to hike its collections to at least Rs 100 crore from cable operators and and get an additional Rs 50 crore from the tax on pay channels.The plan is to auction rights of revenue collection to increase accruals. ``We are proposing to create 23 zones in Mumbai on the pattern of the wards in Bombay Municipal Corporation and auction the zone. The highest bidder will be given the rights to collect the entertainment duty,'' said a senior officer.The finance department has cleared the proposal and the approval of the law and judiciary department is awaited because the Bombay Entertainment Tax Act needs to be amended to auction tax collection.Chief Minister Vilasrao Deshmukh confirmed the move: ``We are working out the modalities of the scheme so that we get maximum entertainment duty from cable operators,'' he said and added: ``We will also make registration of cable operators mandatory so that we get additional revenue by way of registration fee.''
