The Supreme Court has ruled in favour of the PVR Cinemas that Entertainment Tax should be applied solely to the ticket price for cinema or theatre entry, excluding online booking charges. This decision reaffirms the earlier division bench ruling by the Madras High Court.
The bench of Justices B V Nagarathna and Nongmeikapam Kotiswar Singh entertained the case. The apex court emphasised that the additional charge for online booking is for the convenience of purchasing tickets from home, which saves customers the effort and cost of travelling. The Court explained that this service, which saves energy, time, and petrol, justifies the extra charge of ₹30.
Justice Nongmeikapam Kotiswar Singh, questioned how such a service could be subjected to an entertainment tax. The Court highlighted the distinction by noting that premium seats, such as gold class seats where food and drinks are provided, are more expensive due to the additional services offered. The Court rejected the petitioner’s comparison to drive-in theatres, where charges are optional, deeming the analogy inaccurate.
In the Madras High Court ruling, the bench of Justice Vineet Kothari and M.S. Ramesh quashed the reassessment orders for all the years. The bench allowed the writ appeals filed by the assessee, PVR by setting aside the order of the single judge.
“The payment made for any other purpose connected with such entertainment will be taxable under the said Act, only if the person concerned is required to make such payment as a condition for entry,” the High court said in its ruling.
The division bench of High Court declined to support the view taken by the Single bench that the entire price of the ticket when booked online through the Web Portal of the cinema owner by the customer would be eligible for the Entertainment Tax under the provisions of the Tamil Nadu Entertainment Tax Act.
Read HC Order Here: PVR wins Entertainment Tax Case: Online booking charges on tickets not subjected to Entertainment Tax, rules Madras High Court
The Supreme Court dismissed the Special Leave Petition ( SLP ) challenging the Madras High Court’s decision, stating that the Tamil Nadu Entertainment Tax Act, 1939, does not cover the levy of tax on internet services provided by cinema owners.
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