Bombay HC Upholds State’s Power to Levy Entertainment Duty on Online Ticket Booking Charges Above ₹10, Dismisses FICCI's Writ Petition [Read Order]

In a recent judgment, the Bombay High Court upheld the constitutional validity of a 2014 amendment to the MaharashtraEntertainments Duty Act that allows the State to levy entertainment duty on online ticket booking convenience fees exceeding Rs. 10 per ticket.

The court held that such charges, when above the prescribed limit, form part of the “payment for admission” and can be included in the measure of entertainment duty.

The case arose from writ petitions filed by the FICCI-Multiplex Association of India and Big Tree Entertainment Pvt. Ltd. (operator of BookMyShow) challenging a 2014 amendment to the Maharashtra Entertainments Duty Act that allowed the State to treat any convenience fee above ₹10 as part of the “payment for admission,” making it liable for entertainment duty.

The petitioners’ counsel argued that online booking charges were a separate service, already subject to service tax under the Finance Act, 1994, so it should be outside the scope of State’s taxing power under Entry 62 of the State List.

They claimed that convenience fees were optional, unrelated to admission and could not be brought into the tax net merely through an expanded definition clause.

The State defended the amendment, arguing that the convenience fee was directly connected to admission to entertainment and for online buyers, it was a condition for securing entry. They further argued that the law did not create a new levy but merely adjusted the measure of tax to include such charges when they exceeded Rs. 10.

The counsel also argued that the levy fell squarely within its competence under Entry 62 of the State List and did not overlap with the Union’s service tax domain.

A bench comprising Justices M.S. Sonak and Jitendra Jain observed that Section 2(b)(iv) of the Act broadly defines “payment of admission” to cover any payment connected with entertainment that is required as a condition of attending. Since online tickets could not be obtained without paying the convenience fee, the court found it to be an inextricable part of the admission cost.

The court further held that the amendment did not alter the nature of the levy but merely refined the tax measure, a matter within the legislature’s fiscal policy discretion.

Rejecting claims of colourable legislation and legislative incompetence, the court relied on the doctrine of “pith and substance” to rule that the levy remained on entertainment, not on the service of online booking. The Rs. 10 exemption was viewed as a reasonable classification for online ticket buyers and the court dismissed arguments that it violated Article 14 of the Constitution.

The writ petitions were dismissed and the court confirmed the State’s power to collect entertainment duty on convenience fees above Rs. 10 for online ticket bookings from December 29, 2014, the date the amendment received the Governor’s assent.

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