Four matches will be held in Nagpur. "Earlier, the tax was imposed on matches and live performances held in areas under municipal corporations and municipal councils. But with the change in rules, it will be imposed in rural areas too," chief minister Prithviraj Chavan said. World cup matches that will be held in Mumbai attract 25 per cent entertainment tax, but there was no tax for the same match if it is hosted in Nagpur stadium, as the ground is not in the jurisdiction of the corporation limits. "Now any matches or live performances in rural areas would attract ten per cent entertainment tax," the chief minister said, adding, "One doesn't know how many matches or performances will be organized in rural areas in the coming year. Hence, it would be difficult to gauge the revenue that would be generated after the change in the rules," Chavan said.For instance, a live show in Mumbai attracts 25% entertainment tax. Organizers, however, had to pay only 20% entertainment tax for a live show that was held outside Mumbai. There was, however, no provision for entertainment tax on events hosted in rural areas. "To end the disparity in the tax system, the cabinet has given its consent to levy 10% entertainment tax on matches and shows organized in rural areas," the chief minister said, adding, "Folk dance performances and traditional art functions would not attract any such tax."
According to the government officials the tax would vary from 10 to 25 per cent depending on parameters such as the nature of event and the place (whether the event is held in municipal corporation, municipal council or in rural area) where the event is organized.
It may be recalled that a controversy had swept through political circles last year over imposing entertainment tax on IPL matches. The Sharad Pawar led NCP was accused of dragging its feet on the issue apparently in deference to Pawar who had taken a key interest in the IPL. Matters came to a boil last year when the Bombay high Court, while a hearing a PIL filed by Shiv Sena MLA Subhash Desai, pulled up the state government for its failure to levy entertainment tax on IPL matches. Following the embarrassment, the state government finally took the decision to bring all sport events, especially IPL, T20, ODI and live performances under the gambit of entertainment tax.
The state has even made changes in the structure of collecting the ET. According to the earlier rules the revenue department was following two methods to collect the tax.
According to Swadheen Kshatriya, principal secretary (Revenue), the entertainment tax either is collected on the basis of the total gross value of the event or on basis of the entry fee levied by the organizer of the event. "Hereafter the system to collect entertainment tax would be based only on the admission fee (entry fee) fixed by the organizer for the event and not on the total gross value of the programme," Kshatriya said, adding, "The changes have been done to end the disparity in the ET."
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