Jharkhand HC dismisses DTH ops’ plea against entertainment tax

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Jharkhand HC dismisses DTH ops’ plea against entertainment tax



MUMBAI: The Jharkhand High Court has dismissed petitions filed by five direct-to-home (DTH) operators and upheld the state government’s authority to levy entertainment tax. The HC in its order stated that the state government’s levying of the Jharkhand Entertainment Tax Act, 2012 on DTH operators is in accordance with Entry 62 of List II of the Seventh Schedule.


The levy of ‘entertainment tax’ is different from the levy of tax on ‘broadcasting service’ which falls under Entry 92C of List I of the Seventh Schedule of the Constitution of India. The two-member bench comprising Chief Justice R. Banumathi and Justice Aparesh Kumar Singh said that the grounds of challenge raised by the petitioners have been rejected by different High Courts based on the judgment rendered by the Supreme Court. The Jharkhand government had in April 2012 notified the Jharkhand Entertainment Tax Act, 2012 that brought luxury activities including entertainment, amusement, betting and gambling under entertainment tax net.


“The impugned demand notices issued to the writ petitioners are in consonance with the provisions of the Jharkhand Entertainment Tax Act, 2012. The prayer sought for by the petitioners to quash the impugned notices is liable to be rejected,” the bench ruled.

While upholding the validity of the entertainment tax act, the HC stated that the entertainment tax shall not be levied on the cost of set-top boxes (STB) or any other instruments or equipment of like nature. Five DTH operators, Dish TV, Tata Sky, Bharti Airtel, Videocon d2h and Reliance Digital TV had sought quashing of the notification whereby Jharkhand Entertainment Tax Act, 2012 was implemented with retrospective effect from 27 April 2012, contending that it was in violation of the constitution.

The DTH operators had contended that DTH broadcasting services were covered under Entry 92C of the Union List and the levy of entertainment tax under Entry 62 of the State List is an encroachment upon the Union Government’s authority.


However, the Jharkhand HC in its order stated that the Entry 62 of State List and Entry 92C of the Union List operate in two different spheres.


“There is no transgression or encroachment upon the field of Union Legislation and the levy of tax on entertainment through DTH by the State Legislature is not ultra vires,” the HC said in its order. The petitioners had also submitted that even if there is an element of entertainment in the DTH broadcasting service, it is not open to Jharkhand government to levy entertainment tax on DTH broadcasting service under Entry 62 of the State List.


However, the HC stated that the ‘entertainment’ defined by the Jharkhand Entertainment Tax Act, 2012 is not broadcasting service but only entertainment and therefore state legislature is competent to levy tax on entertainment. “In the charging Section 3 of the Jharkhand Entertainment Tax Act, 2012, there is clear intendment of levy of entertainment tax on entertainment provided by DTH,” the HC stated. The HC also said that the different rates of entertainment tax for cable TV and DTH services were not discriminatory.


“In view of the fine distinction between DTH service and cable TV, levy of entertainment tax at the rate of 10 per cent on DTH service vis-à-vis 7.5 per cent on entertainment through cable TV is not discriminatory,” the HC ruled.




Jharkhand HC dismisses DTH ops’ plea against entertainment tax | TelevisionPost.com
 
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