Enertainment tax hike rolled back, multiplexes relieved

A week after the Maharashtra cabinet hiked entertainment tax for multiplexes in the state, it has been rolled back to 45%.

Chief Minister Prithviraj Chavan on Wednesday denied any lobbying by multiplex owners behind the move. "The 45% tax is already high and the decision to hike it is likely to hurt smaller multiplexes. Hence the decision has been taken back," said Chavan.

Last week, the cabinet had okayed the revenue department's proposal to charge 49.5% to 54% entertainment tax for tickets costing Rs 250 to over Rs 500. The decision was aimed at discouraging multiplex owners from increasing ticket prices arbitrarily.

However, the decision to waive entertainment tax for single-screen theatres in municipal councils for five years and rural areas for seven years stays.

Along with the hike in entertainment tax, the cabinet last week allowed multiplexes to levy higher service charges from customers.

Dr Sunil Patil of PVR cinemas said it is a welcome move as the hike would have led to double taxation. "Maharashtra levies the highest entertainment tax in the country. The surcharge would have hurt the industry," said Patil.

A multiplex industry representative said a day after the last cabinet meeting, Revenue Minister Balasaheb Thorat and the CM had a meeting where it was discussed that the hike would mean double taxation and the decision be reviewed. "Eventually, they decided against it," the official said.

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