Maharashtra looks at entertainment tax sops

Move to attract international music and entertainment groups.

Written by MANASI PHADKE | Mumbai | Published: September 9, 2015 1:27 am

Mumbai losing sheen as a venue for live performance of international music and entertainment groups has led the state tourism department to explore concessions in entertainment tax to reverse the trend. The levy being currently among the country’s highest, is being seen as a major reason for international artistes preferring venues outside the state.

Senior officials from the state tourism department held a meeting last month with bureaucrats from the state revenue and forests department and the home department to discuss entertainment tax sops to attract live performances of international brands.

The department of revenue and forests, which collects entertainment tax, has asked the tourism department to draft a detailed proposal with data and statistics of the impact such a move might have on the state’s finances, and how it would spur live performances.

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A senior official from the state tourism department said, “Mumbai has almost died as a venue for live performances, and so have other cities in Maharashtra. Artistes prefer cities such as Bangalore and Delhi. Encouraging live performances will be beneficial for the tourism and hospitality industry. The proposal is still in its nascent stage.”

As per the Maharashtra Entertainment Duty Act, the state government charges 25 per cent tax on tickets and sponsorship within corporation limits of Mumbai, 20 per cent in other municipal corporations, and 15 per cent in A, B and C class municipal councils. For the rest of Maharashtra, the levy is 10 percent. Over the past few years, hip-hop artist Akon and renowned metal band Metallica have chosen other venues in India, skipping Mumbai.

“In other major cities such as Bangalore, Delhi and Chennai, entertainment tax is between 10 and 15 per cent,” said a revenue department official.

Manu Kumar Srivastava, principal secretary, revenue and forests, said, “We are awaiting a detailed proposal from the department… after all, entertainment tax yields considerable revenue, and the finance department will not approve it without being assured of minimal implications.”

Entertainment tax fetched Rs 725 crore in 2014-15. For the current fiscal, revenue and forest departments upped target to Rs 800 crore with Mumbai estimated to contribute Rs 290 crore – Rs 110 crore from Mumbai city district and Rs 180 crore from the suburban district. Districts such as Pune and Thane are expected to contribute Rs 153 crore and Rs 115 crore, respectively.

A major chunk of this is from direct-to-home and cable operators. For instance, direct-to-home and cable operators paid Rs 366 crore, which was over 50 per cent of the 2014-15 earnings from entertainment tax. The rest comes from video parlours, amusement parks, water parks, the state’s two racecourses, bars with orchestra, bowling alleys, pubs and discotheques, and other activities including live performances and movies.

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