Indian Government Reaches Decision On Entertainment Tax

by Mary Swire, Tax-News.com, Hong Kong

14 November 2001

Following a meeting on Thursday, the Indian government Sub-committee on Entertainment announced that it was recommending a uniform ceiling of 60% on entertainment taxes, with states permitted to decide their own duty rates at or below this level.

The sub-committee, chaired by Union Information and Broadcasting Minister Sushma Swaraj also called for the entertainment sector to be treated on a par with the information technology and communication sectors with regard to concessional and local taxes.

Speaking on Friday, the minister said that in the current economic climate, the government felt that setting an entertainment tax above this level would disadvantage the industry, whereas imposing a ceiling could facilitate investment into the entertainment sector and eventually lead to an increase in revenue for the local governments.

Ms Swaraj also revealed that her ministry will soon lead a delegation of industry representatives to the Finance Minister in order to make a pre-budget representation, and that tax relief in relation to broadcasting and film-making will be a high priority issue.

These announcements follow news that as the result of a nine-month investigation which has formed part of a government crackdown on tax evasion, 26 city theatres have been recommended for closure following entertainment tax violations in Bangalore.

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