Wonderla’s Chennai amusement park project stumped by local body tax

‘We are in talks with the government and hope that the issue can be resolved soon’

September 03, 2022 12:48 am | Updated 09:51 am IST - CHENNAI

Amusement parks in Tamil Nadu pay a 10% LBT levied by the State over and above the 18% GST. 

Amusement parks in Tamil Nadu pay a 10% LBT levied by the State over and above the 18% GST.  | Photo Credit: N. Sridharan

It’s been nearly seven years since an MoU was inked between Wonderla, an amusement park operator, and the Tamil Nadu government but the project is yet to take off due to the local body tax (LBT) that is levied by the State. An MoU for this project, which is worth ₹500 crore, wassigned during the first edition of Global Investors Meet (GIM) that happened in 2015 during the AIADMK regime.

“We are still in talks with the government and hope that the issue can be resolved soon,” Arun Chittilappilly, Managing Director of Wonderla Amusement Parks and Resort, said. Pointing out that Wonderla continues to be bullish about its investment commitment in Tamil Nadu, he said, “We have always maintained that we will build the park in Chennai if the LBT issue is solved. The simple truth is that the project is not viable under the current tax laws of Tamil Nadu. At a board level, we cannot okay projects that are unviable,” he added.

A government source said that talks are on with the amusement park operator and a team was here for a meeting last week. “They are in discussions with the State government officials,” he added.

Currently, amusement parks in Tamil Nadu pay a 10% LBT levied by the State government over and above the 18% Goods and Services Tax (GST).

Mr. Chittilappilly said, “Ideally the 10% LBT on amusement parks should not exist for any park. The 18% GST is already steep. Removing the LBT will help the industry to grow again.”

He pointed out that in the early 1990’s Chennai used to be a pioneer in the amusement park industry with names such as VGP, MGM and Kishkinta, but investments in this sector has not come in in the last few years.

“This is one sector that will contribute a lot to the State GDP,” he said. In the last few years, other players in this industry have also made representations to the State government requesting the LBT to be waived.

Land acquired

Wonderla had already acquired 60 acres off OMR in Chennai in 2018. “Once this issue is resolved we can start hiring people and finish the project in about 2.5 years,” Mr. Chittilappilly said.

According to him the demand is huge. “Our current parks get decent footfalls from Tamil Nadu. Kochi gets 20% footfall from Tamil Nadu while Bengaluru gets 10%. So the demand does exist.”

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