Information & Broadcasting minister Sushma Swaraj at the State I&B Minister Meet organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) said that the entertainment tax could be limited to 50-60 per cent. The Centre can only propose for a uniform entertainment tax, it’s upto to State Governments discuss and come to a consensus.
Entertainment tax rates currently vary from 21 per cent in Andhra Pradesh to a whopping 110 per cent in Bihar. The entertainment tax in Maharashtra and Delhi coincides with the average all-India rate of 60 per cent. In contrast, entertainment tax is nil in Hong Kong, 3 per cent in Japan and Singapore and 7 per cent in Thailand.
Speaking on behalf of the industry, chairman of Reliance Entertainment Ltd., Mr. Amit Khanna, said that entertainment tax rates should not exceed 25 per cent. Managing Director of PVR multiplex, Mr. Ajay Bijli felt that the ceiling should be at 20 per cent.
Ms Swaraj further said that, conceding to the demand of the industry, the I&B ministry would push for placing entertainment in the concurrent list.
Neither of these moves is however expected to affect the state government revenues from the entertainment sector adversely. The central government support the demand of lowering the entertainment tax, it is with the explicit assumption that lower taxes will generate more demand for the entertainment sector and will in turn increase revenue while at the same time discourage tax evasion by making evasion less attractive, she said.
Revenue mobilisation through levy of entertainment tax by the states currently yields about Rs 750 crore every year.
The industry also asked the minister to ensure that copyright laws are implemented and piracy is curbed.