Theatres will have to pay double the tax, but cinemagoers will not be affected
The State government has brought Direct To Home (DTH) services and cricket matches organised by Indian Premier League (IPL) into the entertainment tax net.
Theatres will have to pay double the tax on every film screen for each ticket but cinema goers will not bear the brunt.
A Bill passed by the Assembly on Wednesday included DTH services and IPL cricket matches within the definition of the term entertainment to levy tax under Tamil Nadu Entertainments Act, 1939.
The six companies providing DTH services in the State will have to pay 30 per cent of gross charges as entertainment tax, excluding service tax, to the government, based on their subscription base.
“If the DTH provider charges Rs.100 for a connection, then the company will have to pay Rs.30 as entertainment tax. This is excluding sales tax,” an official explained.
Officials promised that customers would not be charged but were apprehensive that the DTH provider could pass on the burden to them.
Doubts were raised in a few other States claiming that DTH was a Central service and questioning how States could levy entertainment tax, and there has been litigation. As of now, court verdicts have favoured the State governments' classification of DTH under entertainment, officials explained.
Bringing the highly successful IPL into the tax net, the government has chosen to levy 25 per cent of the payment for admission, inclusive of the amount of tax, to any of the cricket matches. For instance, if a ticket costs Rs.1,000, then the organisers would have to pay Rs.250 as entertainment tax, officials clarified.
About half-a-dozen States have drawn the IPL into the entertainment tax net.
The government hopes to net Rs.100 crore annually by bringing DTH services and IPL matches under tax net.
It has increased — basically doubled — the rate of tax for admission to any cinematography exhibition in a theatre under Tamil Nadu Entertainment Tax (Second Amendment) Act, 2011.
At present, it charges 15 per cent from ticket charges as entertainment tax for new films screened in the 10 corporations and 22 municipalities. The tax is 10 per cent in other areas. For screening of old films, it is 10 per cent tax throughout the State.
After the passing of the Bill, which came into force at once, the tax rate in corporations and municipalities for screening new films has doubled to 30 per cent. For new films screened in other areas and for old films, the entertainment tax has doubled to 20 per cent.
However, this will not affect cinema goers as there is a cap on ticket charges, officials said. In Chennai, multiplexes could charge only Rs.120.
Now theatre owners would have to pay 30 per cent, Rs.36 per ticket, instead of Rs.18 they were paying till now, as entertainment tax. But, theatres would not be able charge the customer more because of the cap.
Keywords: DTH services, Tamil Nadu government, entertainment tax, IPL matches
Why is a state government so obsessed with cable TV, cinema and cricket? When will people understand that none of these are the 'duties' of a government? We need good roads, good government schools, clean water etc.. These are the needs of the people not low dish tv subscription fees or low price movie tickets! We need to wake up and ask the government to ignore these issues and concentrate on important ones. As a start, why not get an assurance from the government that there will be no/minimal flooding in the roads of chennai this coming rainy season?
It is a good move. Let other States also follow this to augment their sagging finances.
It seems it is a political move. Introduction of The Government cable TV has not enthused the public due to the absence of the Top rated channels including Sun TV. The result is the burst in the sales of the Dish TV.Now the aim of the government is to upset the Dish TV sales. The Government is hoping that the ticket prices of the cinema theatres will not increase. Theatres will indirectly boost their revenue through snacks and other services. It is a futile attempt of the Government.
Since freebees are an essential poll ingredient, the ruling party must find such means improve its finacial position. And Briniging IPL under Entertainment tax can be justified for the use of Cheer Group participating in IPL. Central government should also take initiative on DD-Direct, the governament's DTH, to include Pay channels and start similar tax as it wil result in lesser burden to the citizen.
A very welcome step. The IPL is a money-minting machine which hardly benefits anyone apart from its organizers and the "captains of industry" who organize the extravaganza. It is nothing unjust that the Govt will try to glean benefit from it to serve its people. However, the taxes collected shouldn't simply "disappear" into the deep bellies of fats ledgers and all accounts should be made transparent.
Instead of introducing tax for each and everything the government can reduce the ministers salaries and expenses to 75% and remove pension also for them as they are working only for 5 years. Afterall they are elected by the people.
This is long overdue. The DTH providers are clerverly manipulating their packages and make the people pay more for popular channels. Cinema theatres are another place where the public are fleeced with no amenities. They charge exorbidant rates for parking of vehicles and for the snacks sold in the theatre. They prevent people even taking drinking water bottles inside the theatre nor they provide clean drinking water. Most of the theatres should be converted into schools or foodgrain godowns which will prevent paddy/rice being stored in open.
Another area which is crying for the Govt.'s intervention is auto-rickshaw fares and private taxi operators. These people are also taking the people for a ride whithout any rules or regulations.
The TV channels - who get a lot of revenue from not only subscriptions but also from advertisements - may now increase their telecasting charges for commercial advertisements.May be the advertisers may either cut down on their advertising budgets or absorb the increased costs.However, advertisements by Public Sector undertakings such as Indian Oil,Bharat Petroleum,Aavin,nationalised banks etc., whose products sell, with or without publicity, are likely to show preferences to those channels who are closely associated with political parties, in power.In other words, ultimately the cost escalations will descend on the general public unless some audit checks / monitoring are done on advertisement expenses whether incurred by private or Government undertakings.
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