Entertainment tax

Nowadays, the most discussed subject of those taxes are their implementations to online services, especially the ones working on streaming basis such as Netflix, Spotify and others.

[1] Entertainment falls in List 2 of the Seventh Schedule of the Constitution of India and is exclusively reserved as a revenue source for the state governments.

Historically, before India acquired independence, British government imposed heavy taxes on the events of amusements and entertainment, where a large gathering of Indians could have caused rebellion or mutiny.

The fiscal principle underlying article 246 of the constitution of India separates the sources of taxation for the Union and the States and also maintains the exclusivity.

Entertainment tax structure in India varies across states and is the highest in Uttar Pradesh at 60 per cent.

The Maharashtra government imposed an additional 10 percent entertainment duty on movie tickets priced between Rs.251 and Rs.350 from January 16, 2013.

The new tax slab is somewhat like this: If a multiplex or theatre owner charges up to Rs 250 per ticket, he will not have to pay any additional surcharge.

Mirror has learnt that theatre and multiplex owners will have to go for computerised booking system so that the number of tickets sold is on record.

[4][5] The Central Government's decision is effective from this month, and film and TV actors will be charged 12.36 per cent service tax on their earnings on programmes and endorsements.

), entertainment activities for public participation or attended based on paid membership (sport clubs, etc.)

This rule was changed later that year and now there is total exemption from the tax if the event is live performance and the capacity is less than 1,500 persons.

[18] However, the controversy part of this amendment was including the digital streaming and online entertainment platforms as well (Netflix, Spotify, etc.

However, this affects only temporary services, e.g. the music tracks, movies, games and other online goods bought online and downloaded permanently are not subject to this tax (it is subject to digital sales tax, which in the state of Illinois is equal to 6.25%).

Cape Province introduced the tax in 1913, Natal and Orange Free State in 1917, and Transvaal in 1931.