The Brihanmumbai Municipal Corporation (BMC) is considering an enormous hike in entertainment tax at various entertainment spots in Mumbai. Once approved it could be officially announced and there would be a significant rise in the tax levied on entertainment events such as cinema tickets and live shows.
The amount of entertainment tax imposed on tickets in air-conditioned cinema halls and multiplexes will be increased under the proposed structure from Rs 60 to Rs 400 per ticket. This is about a 570% increase over the rate now in place.
If the tax is to be imposed on non-air-conditioned movie theatres, it’ll climb from Rs 45 to Rs 200 per ticket, which is 400% increase. The proposal includes performing arts events like live music and stage productions. This tax would be raised by Rs 50 per ticket to Rs 100 per ticket for these events.
The BMC has also recommended introducing a new tax brackets for video-screening centers and mini theatres, which have not been in the entertainment tax regime. In the proposed system, these venues will be exempt from paying tax and the tax will be imposed on the purchaser (the ticket taker).
The idea also puts forward a 100% exemption of tax for films shown in Marathi and Gujarati, and for Marathi and Gujarati plays/concerts played at these venues.
But the proposed rates are not yet for the implementation. Approval and notification is to be made by the Department of Urban Development (UD), Maharashtra government and processed due to the changes in entertainment tax structure.
Mumbai’s prevalent entertainment tax rates are to continue till new rates are formally notified. So, if approved, the proposed changes to taxation of entertainment in this city would be significant in the overall system of taxes and could impact the overall tax mix for cinemas, theatres and event venues.