The Bombay high court (HC) on Wednesday restrained the Maharashtra government from charging entertainment duty from entities that provide online movie ticket service.
A division bench of chief justice Mohit Shah and justice AK Menon, however, clarified that the state government will be free to charge and recover entertainment duty from cinema hall owners on the amounts received by them from the online service providers, in addition to the ticket price.
The court was hearing a petition filed by Big Tree Entertainment Private Ltd, which operates the portal — bookmyshow.com — seeking a declaration that convenience charge, which is paid by those who book tickets online, was beyond the purview of the recent amendment to the Maharashtra Entertainment Duty Act, 1923.
The amendment made last December brings online service providers within the purview of the Act, and seeks to recover entertainment duty on the fees collected by these service providers from viewers, in addition to ticket price.
The company approached the high court after the revenue department issued notices to movie hall owners asking them to furnish details of tickets booked online, so that entertainment duty could be levied accordingly. It said the fee charged for booking tickets online is for the facility they provide and is not part of the ticket price and so this could not be brought under the purview of the Act and thus make it amenable to entertainment duty.
Earlier, after hearing the counsel for Big Tree Entertainment, the high court had observed that prima facie a service provider such as the petitioner will not be liable to pay entertainment duty on the amounts received and retained by it for the service of online booking.
Only the cinema halls will be liable to pay entertainment duty on the amounts received by them through service provider if such amount exceeded Rs 10 per ticket. The court had sought the state government’s view on this matter.
On Wednesday, additional government pleader GW Mattos informed the court that the interpretation was not acceptable to the government and maintained that the online service providers too would have to pay entertainment duty in view of the amendment.