Tamilnadu Local Authority Entertainment Tax Act 2017
TN LOCAL AUTHORITY ENTERTAINMENT TAX ACT 2017
After GST came into force on July 1, it
subsumed the state government-levied entertainment tax on cinema tickets, which
was 20% on average, across the nation. GST is levied at 28% for movie tickets
priced above Rs 100, while the GST rate on tickets below Rs 100 is 18%. Through
a Constitutional amendment, local bodies are permitted to levy entertainment
tax.
Soon after GST came into effect, governments in
Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Kerala passed legislation
authorising their local bodies to begin levying local body entertainment tax.
However, so far, only Chennai has actually levied it.
The local body entertainment tax in Chennai is
being levied at 8% for Tamil movies, 15% on non-Tamil Indian movies and 20% on
English movies. For multiplex majors such as INOX Leisure Ltd and PVR Cinemas,
whose theatres are shut in Chennai, Hindi and English films constitute a major
part of the market. The entertainment tax on these movies have effectively
risen to between 48% and 53%
Constitutional provision
The GST 101
constitutional amendment made two provision with regards to taxing on
entertainment 1. Entertainment activity which were held with state list were
subsumed unger GST 2. Taxing levy power given to Local body to impose tax on
entertainment activity held in their jurisdiction of Panchayat &
Municipality, In order to made this changes, government made change in the
entry no. 62 of VII Schedule State list under Indian constitution.
´
Previous
Entry: “Taxes on luxuries, including taxes on entertainments, amusements,
betting and gambling”
´ Currently modified as: “Taxes on
entertainments and amusements to the extent levied and collected by a Panchayat
or a Municipality or a Regional Council or a District Council
Definition & Authorities[1]
All the definition held in previous act i.e
TN Entertainment tax act 1939 taken in this act. Important definitions are
Sec 2(8):- “entertainment” means a
horse-race or cinematography exhibition to which persons are admitted on payment
or television exhibition for which persons are required to make payment by way
of contribution, or subscription, or installation or connection charges or any
other charges collected in any manner whatsoever or an amusement or a recreation
parlour where a game such as bowling, billiards, snooker or the like is
provided or direct to home service or a cricket tournament like the Indian
Premier League or the Champions League Twenty 20 cricket tournament conducted
by the Board of Control for Cricket in India or any other sports tournament
conducted by any person or body of persons for which persons are required to
make payment for admission.
Sec 2(11) :- “Local authority” means
(a) a municipal corporation established
under any law for the time being in force;
(b) a municipality or town panchayat
constituted under the Tamil Nadu District Municipalities Act, 1920; or
(c) a village panchayat constituted under
the Tamil Nadu Panchayats Act, 1994, in whose jurisdiction the entertainment is
provided;
Power to levy tax
As per Section 3 of the Act, the local authorities have been given the power to levy tax on the following entertainments, namely: -
- Cinematograph exhibition in the theaters;
- Horse-race;
- Cinematograph film exhibited on television, screen through Video Cassette Recorder or through Cable Television Network;
- Television exhibition;
- Amusements;
- Recreation parlour;
- Entertainments provided by direct to home service;
- Cricket tournament or any other tournament
Tax rates under tnlaet 2017
|
CATEGORY |
|
TAX RATE |
|
ET on cinema
exhibition in theatres |
New Tamil
Films |
8% |
|
|
New Films
(Other language) |
15% |
|
|
New Films
(English & Forign language) |
20% |
|
|
|
|
|
|
Old Tamil
Films |
7% |
|
|
Old Films
(Other language) |
10% |
|
|
Old Films
(English & Forign language) |
14% |
|
|
|
|
|
ET On
Amusement |
|
10% |
|
|
|
|
|
ET on
Recreation parlour |
|
20% |
|
|
|
|
|
ET on cricket
and other tournaments |
|
25% |
TAX CALCULATIONS
|
CATEGORY |
RATE OF
TICKET / ADMISSION |
CGST |
SGST |
LBET |
TOTAL |
|
Cinema
exhibition in theatres |
150.00 |
13.50 |
13.50 |
12.00 |
189.00 |
|
|
|
|
|
|
|
|
Amusement |
500.00 |
45.00 |
45.00 |
50.00 |
640.00 |
|
|
|
|
|
|
|
|
Recreation
parlour |
500.00 |
45.00 |
45.00 |
100.00 |
690.00 |
|
|
|
|
|
|
|
|
Cricket
tournaments |
1,000.00 |
140.00 |
140.00 |
250.00 |
1,530.00 |
DOUBLE TAXATION
After
seeing the calculation, we will have doubt that, we are paying tax twice for
the same supply? Your doubt may be right, but in the legal view there is
another angel to see it,
The
justification given to impose two taxes for single service are, 1. Experience
of theatre is one service and 2. Exhibiting movie is separate service, hence
legislature are saying here is two different service are involved, hence
imposing two different taxes are not leads to double taxation. The same opinion
was given as judgement in two different case.
Radhakisan Rathi vs Additional Collector Durg And Ors
597 of 1975
This
is was the first case judgement confirming the above view
“It may be mentioned
that cinema theatre situated within a local area the concerned Municipal Council
or the Corporation, as the case may be, may impose cinema tax as permissible
under the Municipal Act but on the same theatre entertainment tax can be
imposed by the State Govt. in exercise of its separate legislative power and
there would be no occasion for the cinema owner to submit that the theatre is
subjected to double taxation”
Balaji
Theatre vs The Chief Secretary W.P. No.33077 of 2018
This
is judgement came out after gst implementation, here court has confirmed in the
year 2018 that GST imposing for different service and Entertainment tax levied
by local body for another subject, hence there is no question of double
taxation.
“In
this case, providing admission into the Cinema theatre is treated as service
and thus, tax on such service is collected under the GST Act. On such
admission, the viewer gets the entertainment viz., Movie and thus, such
entertainment being a different content, tax is levied on the same by the
local authorities as "Entertainment Tax". Thus, the entertainment
itself being a different content, will not fit into the act of service provided
by the theater owner viz., admission of the viewer into the cinema hall.
Therefore, the question of subsuming the entertainment tax under the PGST Act,
or the event of double taxation as contended by the petitioner, does not arise
in this case”
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