Entertainment Tax in India

Entertainment Tax in India:

Entertainment taxes are a part of indirect taxes, imposed by the Government. The government imposes taxes to collect revenue to pay for the services provided like roads, park, security and so on. Entertainment taxes are imposed by the Government on various entertainment related aspects like movie tickets, film festivals, commercial shows, DTH service and so on.

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Entertainment Tax in India

Features of Entertainment Tax in India:

Outlined below are the main features of entertainment taxes:

• The entertainment taxes were introduced by the British Government during the pre-independence era to reduce public gatherings.
• The entertainment taxes are collected by the State Government from the people.
• Entertainment taxes differ across states as they depend on the discretion of the State Government.
• These taxes are applicable in some or the other form to entertainment related industries across India. The entertainment taxes are mainly charged on tickets at various stage shows, movies, and amusement parks.
• Article 246 of the Indian Constitution states the various rules and regulations that pertain to entertainment tax in India.
• Entertainment taxes also include the charges paid towards DTH connection.
• Entertainment taxes are applicable on the following forms of entertainment:

1. Theatre shows
2. Stage shows
3. Video game arcades
4. Amusement parks
5. Exhibitions
6. Sport related activities

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Entertainment Tax Rates Applicable to Various States in India:

The entertainment taxes are imposed by State governments and different States have different rates of Entertainment Tax. The percentage of entertainment tax that is imposed in a state is at the discretion of the state government. The table below summarises the entertainment tax applied by various state governments:

Name of the state	Rate of tax
Uttar Pradesh	60%
Bihar	50%
Maharashtra	45%
Karnataka	30%
Kerala	30%
West Bengal	30%
Haryana	30%
Orissa	25%
Delhi	20%
Madhya Pradesh	20%
Gujarat	20%
Andhra Pradesh	20%
Assam	15% for tickets > Rs. 20 20% for tickets < Rs. 20
Tamil Nadu	15% ( all Tamil films are tax free in the state)
Jharkhand	10%
Rajasthan	0%
Himachal Pradesh	0%
Jammu and Kashmir	0%
Punjab	0%

Impact of GST Rates on the Entertainment Industry:

The table below shows the current tax rates that are applicable on the entertainment sector after the implementation of GST from July 2017:

Types of entertainment	Tax rates
Theatre Drama and Indian classical dance circus	18%
Film festivals and movies Amusements parks Race Casino and video games arcades sport events like IPL	28%

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Frequently Asked Questions

What is the entertainment tax?

Entertainment tax is a type of indirect tax levied by the Government on the entertainment sector. These taxes apply to commercial shows, private festivals, movie releases and are deducted from the gross collection. It is also imposed on movie tickets, tickets for IPL matches, amusement parks and also DTH connections. 

Is entertainment tax considered as a direct tax?

Entertainment tax is a type of indirect tax. Indirect taxes are imposed on goods and services and as entertainment is a type of service provided, it’s listed under the indirect tax category. The direct taxes are those that are levied on the income of a person.

How much is tax on movie tickets?

In multiplexes and theatres, the movie ticket ends up attracting 28% GST. Additional taxes are also levied on the foods and beverages sold in these multiplexes.

What is entry tax in India?

Entry tax is levied on the movement of goods from one state to another. The tax is imposed by the state governments and is levied by the recipient state to protect the tax base.

What is the maximum deduction for meals and entertainment?

In most cases, the entertainment tax that can be deducted is 50%. However, a person can deduct only 50% of the meal cost in case they are for entertainment purposes, but cannot deduct if they are for the purpose of business travel.

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