Is entertainment tax legal?

Entertainment tax is levied by the state governments. As of now, after the introduction of GST, there is no separate entertainment tax. GST is in force and there is no entertainment tax. When separate entertainment tax was there, it was varying from state to state. Some states were imposing very less entertainment tax and some states were imposing a very high percentage of tax even up to 110%. A movie ticket costing 100 rupees has to collet 110 rupees tax those days. Now the GST rate is the same all over the country and there is no separate entertainment tax. Only GST. If anybody is charging this tax over and above GST, it is not legal and the same can be brought to the notice of the concerned officials.
Movie tickets, sporting events, music festivals, amusement parks, exhibitions, theatre shows, and other private festivals were coming under the purview of entertainment tax and now they also charge only GST and the percentage will as fixed by the government from time to time.

Entertainment tax is fully legal and the same deciding by the state governments in India before. With the launch of the Goods and Services Tax (GST) on July 1, 2017, it decided to collect equally throughout India. Please find below different types of entertainment taxes and their percentage.

1)Entertainment tax on movies

Due to the implementation of the Goods and Services Tax (GST) on July 1, 2017, the entertainment tax on movie tickets costing Rs 100 or less decided as 18% and than that of tickets costing Rs 100 or more rate decided as 28%. Before GST, the tax based on the decision by respective state governments. It was from 0% to 110% in different states. For example, Jharkhand had 110% and Uttar Pradesh had 60%. With the introduction of GST, it come down to 28%. Now the decision on GST will be taken by a national-level committee including each state Finance ministers.

2)DTH and cable services

Prices of Direct-To-Home (DTH) and cable services will also come down with GST. The GST Council has fixed 18% tax rate for cable TV and DTH services. Before GST, these services attracted an entertainment tax in states in the range of 10-30% besides the service tax levy of 15%. So we can see the GST implementation proved price reduction on these services as entertainment tax came down drastically.

3) Sports and concerts

Club culture in sports - like the Indian Premier League which is a mix of entertainment and huge prize money - will attract the highest tax slab of 28%. All other events organized by recognized sports bodies like the Indian cricket board or the hockey federation will attract 18% on tickets. The GST rate for the circus, theatre, Indian classical dance including folk dance and drama will be 18%, which would be lower than the previous tax rate which was decided by the state governments.

Tax on entertainment is completely legal which is levied by the state government and the rates range from 0 to 110%, with an average of 30% depending upon the areas and facilities provided. For example, if a movie ticket costs you 100 rupees then 18% would be GST charges and if it is more than 100, 28% charges will be imposed.

In order to understand taxes in India, need to understand direct and indirect taxes:
Taxes are mandatory fees that is imposed on individuals and corporations by states or central government. This amount are used to build the economy of a country by meeting various public expenses.

1. Direct tax:
- Tax levied on the taxpayers directly, this can not be passed to someone else.
- The different direct taxes are income tax, Estate tax, Wealth tax, etc.
- Advantages of direct tax are - It curbs inflation. In order to maintain social and economic balances, the government has well-defined tax slabs for different individuals depending upon the earnings.

2. Indirect tax:
- Tax levied by government on goods and services. It can be shifted from one taxpayer to other
- Earlier indirect taxes were: custom duty, central excise duty, service tax, sale tax, value-added tax, etc.
- Earlier, an indirect tax meant paying more than the actual price of a product you bought or you had any services.

3. Introduced GST as Indirect tax:
- Now the slogan "One Nation, One Tax, One Market" becomes the reality in India.
- The biggest relief is the elimination of the 'cascading effect of tax', in other words, it was the 'tax on tax'.

GST came into play with effect from 1 st July 2017 and as a result of the introduction of GST, there has been substantial reduction of entertainment tax being charged from states to states.
Movies -
In respect of cinema tickets , GST council has levied a fixed rate of 18 % for the tickets costing less than Rs 100/- or any amount exceeding Rs 100/- will come under the preview of 28%.
The new tax regime has offered substantial relief to the customers where in they need to pay either 18% for the tickets below Rs 100/- or 28% in case of tickets costing more than Rs 100/-
Initially, entertainment tax in most of the states were higher ( except in case of Assam, Punjab, Uttarakhand where entertainment tax was zero) than the prevalent GST regime. In Jharkhand, entertainment tax was to the extent of 110% and in case of UP it was around 60% and for Maharastra and Karnataka it was 45 % and 30 % respectively.
DTH and Cable Service -
Prices of DTH and Cable services have come down as a result of introduction of GST regime where a flat rate of 18% is being charged as against the earlier provision of entertainment tax where it was charged within the bracket of 10% and 30 %.

Before the GST regimes states were levying entertainment tax as per the state tax legislation and its rates varied from state to state. In some states it was as high as 110% also. For example in UP it was levied at 60% of the basic ticket price. It means that if the basic ticket was Rs 60 then tax was Rs 36 making the ticket actually as Rs 96. So, the entertainment tax was very well legal as per the individual state laws and was a good source of revenue for the working and managing expenses in the state. Actually state earns revenue mainly from land transactions, municipal taxes and entertainment tax and the role of entertainment tax was very crucial in state economy. Now the same collection has been converted in terms of GST.

Entertainment tax is levied not only on movies but many activities like Exhibitions, Activities related to sports, Amusement Parks, Game Arcades and Video Games, Stage Shows, Theatre etc.

Once the GST regime came in the tax rates were rationalised throughout the country and now it is charged at a uniform rate of 18% for basic tickets costing up to Rs 100 and 28% for tickets costing more than Rs 100.

In India, the British government levied heavy taxes on the entertainment and amusements; so the state governments imposed entertainment taxes.

The entertainment tax is no longer applicable in India. Entertainment tax is a tax levied by the Government of India on entertainment purposes i.e. Movie Tickets, Commercial Shows, and other private festival celebrations.

After, GST (Goods and Services Tax) implementation on these services the entertainment tax is not applicable now.