The Madras High Court affirmed that the entertainment tax not applicable on online booking charges for cinema tickets.
The issue raised in the case was whether the āonline booking chargesā charged by a Cinema Hall Owner besides the ācost of ticketā for entry into the cinema hall and enjoy the entertainment in the form of a movie, was a part of taxable receipt by the Cinema Owner for the purposes of the Tamil Nadu Entertainment Tax Act, 1939.
The division bench of Justice Vineet Kothari and Justice M.S. Ramesh took into consideration the case of PVR Ltd. v. CTO wherein it was held that entertainment tax is a State subject and before the said levy of Entertainment Tax being subsumed under the GST Laws enforced in the country with effect from 1 July 2017, was the payment for admission, which as per the definition given in the Tamil Nadu Entertainment Tax Act, 1939, as amended from time to time in Section 3(7)(c) was that 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 court noted that separate payments for separate facilities are not exigible to Entertainment Tax.
Therefore, the court concluded that online booking charges or internet handling charges was not a mandatory payment for gaining entry into the cinema hall, it was an additional payment for extra or other facility provided by the Cinema hall owner thus, the same could not be subjected to entertainment tax.
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