Multiplexes, theme parks in Maharashtra yet to get entertainment tax refund

Mumbai: Theme parks and multiplexes in Maharashtra may move court to get the entertainment tax refund that was promised as incentive in the state’s tourism policy but was later subsumed under the goods and services tax (GST).
These companies haven’t received tax refund despite a high-level committee — formed by the order of the Bombay High Court — allocating 110 crore for speedy processing of the grants.

With no respite in sight, these companies are considering moving court for relief, an industry executive told ET, requesting not to be named.

In December 2018, the high court had directed the Maharashtra government to form a high-level committee to look into the matter related to an entertainment tax waiver extended to Adlabs Entertainment.


“The arguments as of now are with respect to obtaining some portion of the refund due in a timely manner. However, subsequently the court will have to determine the quantum and the periodicity for which this benefit should continue,” said Abhishek A Rastogi, partner at Khaitan & Co, who is arguing petitions on legitimate expectancy.

He said, “When entertainment tax is subsumed in GST, the resultant taxes are an aggregate of federal and state taxes and, hence, even the central GST portion of the taxes should be considered for refund, or the periodicity of the exemption period should be extended.”

Under the state’s tourism policy, the state government had waived off entertainment tax — then at 15% — in order to incentivise theme parks and multiplexes. However, after GST was introduced in July 2017, the entertainment tax was subsumed and an 18% GST was levied.

Many companies filed petitions in the court seeking relief, arguing that the change in the tax regime had made the business unviable.

Later, the high court passed an order to form a high-level committee to determine the methodology for extending the entertainment tax benefits.