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Maharashtra govt promulgates entertainment tax ordinance

MUMBAI: The Maharashtra government has promulgated the Maharashtra Entertainments Duty (Amendment) Ordinance 2014 that puts the onus of depositing entertainment tax on the multi-system operators (MSO) even as the local cable operators (LCOs) will collect the tax from consumers.

The government promulgated the ordinance as both the houses of the state legislature were not in session and the Governor was satisfied with the circumstances to approve it.

The promulgation comes in the wake of the Maharashtra Cabinet approving amendments to the Bombay Entertainment Duty Act, 1923.

So far, LCOs who transmit signals from the MSOs to the end customers have been paying the entertainment tax to the state government.

As per the amendment, the MSOs will have to pay the entertainment tax to the state government. However, cable operators can pay the tax directly in case they are not affiliated to any MSOs.

The government has increased the penalty for non-payment of entertainment tax to Rs 25,000 from Rs 500. Furthermore, the LCOs will be required to deposit Rs 500,000 as security.

The move is expected to help the state government to double its entertainment tax revenue to Rs 11 billion from Rs 5.5 billion.

This is not the first time the state government has attempted to put the responsibility of paying entertainment tax on the MSOs. The government had last year issued two government resolutions (GRs) first on 7 March and then on 11 October, asking the MSOs to pay entertainment tax directly to the state government.

Both the GRs were successfully challenged by the Maharashtra Cable Operators Federation (MCOF) in the Bombay High Court which asked the state government to maintain status quo while allowing the LCOs to pay entertainment tax either to the court or to the district collectorate.