States to be asked to reduce entertainment tax

NEW DELHI OCT. 13. Armed with evidence that ``lower entertainment tax brings in good revenue'', the Information & Broadcasting (I&B) Ministry today decided to request all State Governments to reduce entertainment tax to 45 per cent. A decision to this effect was taken here at the meeting of the sub-committee on the development of entertainment in view of the experience reported from the 10 States that reduced entertainment tax in response to a similar request made in November 2001 to bring it down to 60 per cent.

Briefing reporters after the meeting — which was attended by the representatives of 10 States - the Union I&B Minister, Ravi Shankar Prasad, said the very same sub-committee had in November 2001suggested that States cap their entertainment tax at 60 per cent. As many as 10 States had responded positively with Himachal Pradesh doing away with it completely.

Other States which have reduced their entertainment tax are: West Bengal (30 per cent), Uttar Pradesh (60 per cent), Tamil Nadu (25 per cent) besides Chandigarh, Gujarat, Haryana, Jammu & Kashmir, Madhya Pradesh and Punjab where it is now a uniform 50 per cent. Hoping that other States would follow suit, Mr. Prasad said in the meanwhile, the sub-committee thought it fit that States be asked to further reduce the entertainment tax to 45 per cent as it makes ``good business sense''. Apparently, States that had reduced their entertainment tax had seen a return of people to theatres.

Another decision pertained to appointing a nodal officer in every State to ensure against piracy that is the bane of the entertainment industry. Besides asking States to appoint a high-ranking police official as the nodal officer, efforts would also be made to sensitise and train the police on piracy issues. Similarly, it was decided to designate an official in every district to monitor the implementation of the Cable Act and to ensure against its violation.

This apart, the sub-committee decided to set up a separate panel to provide a status report on the experience of States, which had seen the computerisation of cinema tickets by various theatres. Besides representatives of Andhra Pradesh, Maharashtra, Haryana and West Bengal, the committee will include the chairman of the Multiplex Association of India and a joint secretary of the Ministry.

The Multiplex Association has also been asked to work with Federation of Indian Chambers of Commerce and Industry on the changes that ought to be made in the laws pertaining to the entertainment industry to help it realise its true potential.

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