The state government cannot levy surcharge on the entire entry fee of amusement parks, but only on the entertainment fee, ruled the Bombay high court on Friday.
A division bench of justice JP Devdhar and justice Mridula Bhatkar set aside the demand notice sent by the government to Tikuji Ni Wadi and Muchhala Magic Land Private Limited (Suraj Water Park), amusement parks situated in Thane district, asking them to pay surcharge on entry fee.
The amusement parks had challenged the demand notice sent by the government on August 17, 2010, to recover 10% surcharge on the admission fee charged by the petitioner herein to the various patrons, who visit their amusement-cum-water park.
Advait Sethna, counsel for the amusement parks, argued that the surcharge is to be levied only on the entertainment tax as per the Bombay Entertainment Duty Act, 1923. “Also, such retrospective demand is also bad,” said Sethna.
According to their petitions, a visitor/patron visiting the amusement/ water park is issued a ticket for admission. The ticket is divided into three parts — admission fee, entertainment duty/ tax and the surcharge on the entertainment duty/ tax. The surcharge is to be paid only on the entertainment duty and not the entire admission fee.
Tikuji Ni Wadi’s petition stated that they have already paid entertainment duty/tax to the tune of Rs28,65,265, as well as the surcharge applicable on the entertainment duty/tax, amounting to Rs2,86,527.
However, the state send them a demand notice, asking for payment of Rs12,20,073 towards surcharge on the admission fee.
Similarly, Suraj Water Park had paid entertainment duty of Rs17,37,411 and surcharge thereon of Rs1,73,741, which is 10% of the entertainment tax/duty. They were asked to pay Rs10,10,000 by the state.