New Delhi: According to the statement issued by the government today, the Goods and Services Tax (GST) regime that will be rolled out from 1st July 2017 will bring down the Taxation on entertainment, cable and DTH services as the ‘entertainment tax’ levied by states has been subsumed in the GST.
The Finance Ministry in a statement said services by way of admission to entertainment events or cinematography films in cinema theatres will attract 28 per cent GST with effect from 1st of July against the present scenario wherein the states impose entertainment tax of up to 100 per cent in respect of exhibition of cinematography films in theatres/cinema halls.
However, the taxes levied by a panchayat or municipality on entertainments and amusements will continue under GST despite the subsuming of entertainment tax by the govt.
“Thus, entertainment services shall suffer a lower tax incidence under GST. In addition to the benefit of lower headline rates of GST, the service providers shall be eligible for full input tax credits (ITC) of GST paid in respect of inputs and input services,” the ministry said.
The GST Council has finalised 18 per cent tax rate on cable TV and Direct-To-Home (DTH) services. Currently, these services attract an entertainment tax in states in the range of 10-30 per cent over and above the service tax levy of 15 per cent.
With regard to circus, theatre, Indian classical dance including folk dance and drama, the GST rate is 18 per cent ad valorem. Further, the GST Council has approved an exemption up to a consideration for admission of Rs 250 per person.These services currently attract entertainment tax levied by the states, he statement said.
“Presently, such service providers are not eligible to avail of input credits in respect of VAT paid on domestically procured capital goods and inputs or of Special Additional Duty (SAD) paid on imported capital goods and inputs,” the statement added.
Thus, while GST is a value added tax, entertainment tax, presently levied by the states is like a turnover tax, it added.
