Recently, the Supreme Court while upholding the Madras High Court decision held that the entertainment tax is not payable on online movie booking charges.
The court ruled that “Extra charge is not for entertainment but it is for the convenience of the people who can book the ticket online without having to travel all the way to the cinema theatres. Petrol/Diesel saved, parking fees etc. This is the convenience charge that is being taken. How can it be under entertainment tax?,”
The bench stated that the charge was being levied for a service and cannot fall under the purview of entertainment tax.
“So instead of going directly to the cinema theatre where I can get the ticket directly, I am buying it from my home, so that is the charge you are taking for your service. How will that come under entertainment tax? I am getting a ticket through luxury instead of going to talkies or theatres. Will this be under entertainment tax? This is extra convenience that is being provided to me. It has no link with the movie or entertainment part,” the court remarked.
Issue Raised
Whether entertainment tax is payable on online ticket booking charges?
Ruling By Madras High Court
Madras High Court held that online booking charges levied by cinema hall owners which do not form part of the ticket cost, cannot be subjected to entertainment tax under Tamil Nadu Entertainment Tax Act, 1939.
The department appealed against the order of the Madras High Court and contended that extra charges that are paid online are to watch the movie and should, therefore, come under the head of entertainment tax.
The Apex Court dismissed the appeal of the department.
Case Name : Commercial Tax Officer v. PVR Limited
Judicial Level & Location : Supreme Court
Case Number : SLP(C) No. 4312-4316/2022
Date Of Ruling : 30-07-2024
Ruling In Favour Of: Assessee
Coram: Justice BV Nagarathna and Justice N Kotiswar Singh
Petitioner Advocate: Sabarish Subramanian
Respondent Advocate: Dhananjay Garg
