AAP defends decision to hike entertainment tax by 50% in Delhi

The hike in entertainment tax from 20 per cent to 40 per cent is expected to make TV and movie viewing expensive in Delhi

BestMediaInfo Bureau | Delhi | July 21, 2015

In a move that is expected to make DTH, cable operators and exhibitors see red, the Aam Aadmi Party (AAP)-led Government in Delhi has reportedly given its nod to increase entertainment tax in the state by 50 per cent – from 20 per cent to 40 per cent – with effect from July 20, 2015.

This proposal was tabled by Deputy Chief Minister Manish Sisodia in the Assembly last month and received the Government's approval. Meanwhile, it is learnt that the Delhi Government is also contemplating to increase the luxury tax from 10 per cent to 15 per cent.

The Opposition has reacted sharply to this development and has accused the Government of cheating people.

When contacted by BestMediaInfo.com, AAP spokesperson Raghav Chadda defended his Government's decision and said, “The entertainment tax hasn't been revised since 2006-07. Thus there was an urgent need to revive. Besides, these changes have been made in accordance with the prevailing rates in other states like Maharashtra and Gujarat. There was also a proposal to increase the motion pictures tax, but we didn't touch that.”

Delhi contributes a substantial amount of box office collections for Hindi movies and the hike in entertainment tax would negatively impact cinema halls, including multiplexes. PVR Cinemas is likely to be hit more. According to reports, more than 20 per cent of PVR businesses come from Delhi, where it has 13 properties. In addition to this, the multiplex chain also has eight properties covering the NCR regions of Noida, Gurgaon and Faridabad.

Ticket rakes in Delhi are usually higher compared to Noida and Gurgaon.

Along with the multiplexes, this move will also affect cable operators and DTH (Direct-to-Home) companies. All of whom are likely to pass on the additional burden on the consumers.

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