PVR wins Entertainment Tax Case: Online booking charges on tickets not subjected to Entertainment Tax, rules Madras High Court [Read Judgment]

PVR - Entertainment Tax Case - Online booking charges - tickets entertainment tax - Madras High Court - Taxscan

The Madras High Court while dealing with the case filed by the PVR held that online booking charges on tickets not subjected to entertainment tax.

The assessing officer took a note of the letter of the assessee, PVR that levy of Service Tax and Entertainment Tax on online ticket booking charges are mutually exclusive but as the assessee has not paid Service Tax for online ticket booking charges, therefore he is liable to pay Entertainment Tax on charges collected for online booking.

However, the assessee has paid Service Tax under Finance Act, 1994 on such ‘online booking charge’ for the period from July 1, 2012.

The issue raised in the case was Whether the “online booking charges” charged by a Cinema Hall Owner besides the “cost of ticket” for entry into the cinema hall and enjoy the entertainment in the form of a movie, is a part of taxable receipt by the Cinema Owner for the purposes of the Tamil Nadu Entertainment Tax Act, 1939, is the question which arises for consideration in the present intra court appeals, filed against the order of the learned Single Judge.

The Single Judge was pleased to dismiss the Writ Petitions of the Cinema Owner, M/s.SPI Cinemas Pvt. Ltd., popularly known as ‘PVR Cinemas’, and hold that the entire price of the ticket when booked online through the Web Portal of the cinema owner by the customer would be exigible to the Entertainment Tax under the provisions of the Tamil Nadu Entertainment Tax Act.

The high court bench of Justices Vineet Kothari and M.S. Ramesh quashed the reassessment orders for all the years. The bench allowed the writ appeals filed by the assessee, PVR by setting aside the order of the single judge.

The court held that it is a separate service which is not uniformly charged for from all cine goers as mandatory payment for entertainment, and hence is not liable for imposition of entertainment tax.

“The payment made for any other purpose connected with such entertainment will be taxable under the said Act, only if the person concerned is required to make such payment as a condition for entry,” the court said.

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