sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

Entertainment tax defeats purpose of goods and services tax (GST)
November, 19th 2010

Yet another dialogue among the state finance ministers in the balmy climes of Goa failed to create a consensus on the goods and services tax (GST) design, including the constitutional amendment for its introduction.

The worrisome aspect is that the various political bargains being made would undermine the basic objectives of GST. One such bargain is the continuation of the entertainment tax (currently levied on movie admissions and cable and DTH subscriptions) in addition to the GST. This is a matter of deep concern as it would give rise to significant distortions and be highly discriminatory to the film and television sector.

Supplementary taxes under GST are normally levied on sin products like alcohol and tobacco or polluting products. Such a tax on films is not justified. Indian films are one of the finest expressions of our art and culture and have been instrumental in showcasing India across geographical boundaries.

They need to be nurtured and encouraged. Internationally, entertainment is included in the VAT or GST base and is taxable like any other good or service. There are no examples of a supplementary tax being imposed in any of the countries reviewed.

In fact, the film industry is recognised as a priority industry and is subjected to reduced GST/VAT rates, and granted significant fiscal incentives. France, Germany, Spain and Sweden, for instance, charge super reduced VAT/ GST rates, which provide a reduction of more than 50% of the standard rates.

In India, the current entertainment tax structure is seriously flawed. It is a patchwork of many taxes being levied at punitive rates.

For example, movie admissions in Uttar Pradesh attract tax at a rate as high as 67%. Cable and DTH subscriptions attract the central service tax of 10.3%, as well as state or local taxes which could be as high as Rs 45 per month (in Mumbai).

Further, entertainment activities are inter senot treated at par and each activity attracts a different tax rate. Entertainment includes a variety of activities including art exhibitions, performance, game, sport or race, cinematographic exhibitions , amusement parks, video game parlours, bowling alleys and billiards/ pool joints, to name a few. Some of these are taxable, but others exempt. Where the tax applies, there is no uniformity in the tax design or the rate.

There is variation in the tax rates on the same entertainment source, but acquired at different places. For example, the tax on movie tickets can depend on the category of the city/town or its population. Many states grant exemption or apply subsidised tax rate on movies produced in regional or state languages. Some states exempt newly set up theatres/ multiplexes , creating discrimination against old theatres.

Separate tax on entertainment poses significant practical difficulties in the present times of fast-paced technological advancements and resultant mobility of entertainment avenues.

With the advent of modern technology , entertainment has taken more diverse forms and has become highly mobile . For instance, movies and films can be watched not just through cinema halls, cable or DTH connections but also on computers, mobile phones and media players.

Given this diversity, it is difficult to apply a separate tax on entertainment in a fair and equitable manner. Currently , cinema tickets and DTH and cable connections are subject to entertainment tax, which can be avoided if you watch a programme or movie at home on a DVD.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
System Testing Solution Manual Software Testing Solutions Automation Software Testing Solutions System Workflow Testing System Manual Testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions