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India Today
5 days ago
- Entertainment
- India Today
Court upholds Maharashtra order to charge entertainment duty on convenience fees
The Bombay High Court on Thursday upheld the Maharashtra government's decision to charge entertainment duty on convenience fees collected during online movie ticket bookings. The ruling came on Thursday, after the court dismissed two petitions filed by the FICCI-Multiplex Association of India and online ticketing platform BookMyShow.A bench of Justices MS Sonak and Jitendra Jain said the convenience fee charged for booking tickets online was directly linked to access to entertainment. "The online ticket booking charges are directly connected with buying a ticket for entertainment without which a person cannot enter the theatre," the court noted, adding that the distinction between services inside and outside the entertainment area was "superfluous".advertisementThe case revolved around a 2014 amendment to the Maharashtra Entertainments Duty Act (MED Act), which allows the state to levy entertainment duty on convenience fees exceeding Rs 10 per ticket. The petitioners argued that this fee was for a separate service—online booking—on which service tax was already being paid under the Central Finance Act. They claimed the state had no authority to tax it, as it was unrelated to the actual screening of movies. Senior advocate Naresh Thacker, representing the Multiplex Association, said there was "no direct nexus" between the fee and entry to entertainment, calling the levy unconstitutional and outside the state's powers under the Constitution. He argued that selling tickets online was a different business activity from showing films in in its separate petition, said it was "merely a service provider" and not the entertainment organiser. It called the move a "colourable exercise of power," claiming the real aim was consumer protection rather than Maharashtra government, represented by Additional Government Pleader Milind More, defended the amendment. He said the convenience fee formed part of the overall cost of watching a movie and therefore could be taxed. The 2014 change to the law, he added, was aimed at preventing excessive booking court agreed with the state's view, stating that the power to impose entertainment tax lies with the state legislature. It rejected the argument that the fee was unrelated to entertainment, saying the service was inseparable from the process of gaining entry to a just last month, the same bench had struck down two earlier state government orders from 2013 and 2014 that had completely barred cinema owners from charging convenience fees on online ticket Thursday's ruling, while cinema owners and ticketing platforms can charge such fees, any amount above Rs 10 per ticket will attract entertainment duty.- Ends
Hindustan Times
5 days ago
- Business
- Hindustan Times
HC upholds tax on online ticket booking fee
MUMBAI: The Bombay High Court on Thursday upheld the Maharashtra government's right to levy entertainment tax on convenience fees charged during online ticket bookings, whether or not the platform is owned by multiplexes. HC upholds tax on online ticket booking fee The ruling was delivered by a division bench comprising Justice MS Sonak and Justice Jitendra Jain, while hearing petitions filed by the FICCI-Multiplex Association of India and Big Tree Entertainment Pvt Ltd. The petitioners had challenged the state's authority to levy entertainment tax on convenience fees under the Maharashtra Entertainments Duty (Amendment) Act, 2014. The petitioners had challenged the 2014 amendment, which enabled the state to impose a tax on convenience fees collected when tickets are booked online. They argued that entertainment tax should only apply to the base ticket price, and that convenience fees – being a separate charge – should not be added to the ticket value for the purpose of taxation. They also contended that such fees are already taxed under the Finance Act, 1994, a central law, and therefore fall outside the purview of the state's taxing authority. 'What is sought to be taxed is the form of entertainment and admission thereto, which features a movie/film, and there is no dispute that the members of the petitioner No 1 (Multiplex Association) are engaged in the business of featuring movies/films. This is the subject matter of the tax or duty,' the court observed in its ruling. The bench further reasoned that access to a movie requires a ticket, and when such tickets are booked online, the associated convenience fees become a precondition to entry. 'A person cannot buy an online ticket without paying the convenience fees, and consequently, he would not be entitled to entertainment, nor would the theatre owner permit such an individual to enter,' the judges stated. Hence, they concluded that the payment of convenience fees is inherently linked to the right of entry into the entertainment venue. The court also drew a distinction between the Finance Act, 1994, and the Maharashtra Entertainments Duty Act, 2014, noting that while the former imposes a service tax on activities, the latter levies duty on admission to entertainment. 'For calculating the duty, one of the measures of tax to be included is the amount charged as convenience fees,' the court said, thereby upholding the validity of the state legislation.
Time of India
5 days ago
- Entertainment
- Time of India
Bombay high court upholds entertainment duty on online ticket booking convenience fees
Mumbai: In a boost to the state, Bombay High Court on Wednesday upheld the constitutional validity and reasonableness of a 2014 amendment to the Maharashtra Entertainments Duty Act. This amendment empowered a levy of entertainment duty on convenience fees exceeding Rs 10 by online ticketing platforms and movie theatres for virtual booking. HC dismissed two petitions filed around a decade ago challenging the state's move. An interim stay on the levy, though, will continue for another four weeks, HC said, to enable an appeal. The HC division bench of Justices M S Sonak and Jitendra Jain held the argument that the state lacks the power to levy entertainment duty on the activity of providing convenience through online ticket booking is based on the incorrect assumption that online ticket booking constitutes a separate business activity. You Can Also Check: Mumbai AQI | Weather in Mumbai | Bank Holidays in Mumbai | Public Holidays in Mumbai Under the Maharashtra Entertainments Duty (MED) Act, duty is levied on admission to the entertainment venue—a cinema, theatre, matches, amusement parks, among others—and for calculating the duty, one of the measures of tax to be included is the amount charged as convenience fees. After a detailed analysis of the law, Justice Jain, authoring the judgment, said the "petitioners are not justified in claiming that the activity of online ticket booking is a separate activity intended to be taxed under'' a list covered by the Centre. HC said if the individual purchases a ticket online, the charges paid as "convenience fees" would be regarded as a condition for attending the entertainment, and thus, these would fall within the scope of the measure of tax. One petition was filed by FICCI-Multiplex Association of India, based in Delhi, and its Pune-based secretary D D Chaphalkar, and the other by Big Tree Entertainment and its director Rajesh Balpande in Mumbai to challenge the validity of the state's move to levy and collect entertainment duty on convenience fees for the provision of online ticket booking. The state issued the GR on Dec 29, 2014. By the amendment, it inserted a provision to the MED Act to exclude taxing of convenience fees up to Rs 10 either by multiplex owners or online, provided data is submitted before the seventh day of every succeeding month; but any amount of Rs 10 or more will be considered as admission fee and suitably taxed. The state said the use of modern technology enabled and led to high demand for online booking for various entertainment, with service providers charging an "exorbitant amount per ticket as internet handling fee or convenience charge for online ticket booking service, which resulted in undue financial exploitation of persons admitted to such entertainments.'' The entertainment duty levy proposed in 2014 was to "curb this exploitation,'' the state submitted. The multiplex owners questioned the state's legislative competence to impose such a levy on the service fee. They said the state wrongly transgressed to invoke the Centre's power. The activity of rendering a service is taxed by the Centre, while the entertainment activity is taxed by the State on the basis of admission cost. HC also noted that the MED Act provides that entry is not permitted without a valid ticket, and thus petitioners cannot argue that only the amount paid for the ticket should be considered the payment for admission, which is the basis for the duty payable. Stay updated with the latest local news from your city on Times of India (TOI). Check upcoming bank holidays , public holidays , and current gold rates and s ilver prices in your area.
