AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1087
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....r is a Cinema Theater, run by a partnership firm. Till the introduction of Goods and Services Tax, the Government of Puducherry was collecting entertainment tax from the theater owners. In the year 1995, the Government, by its G.O.Ms.157 dated 20.10.1995, exempted 10% for maintenance and permitted to pay the entertainment tax for the remaining 90%. After introduction of GST, the 6th respondent issued a notice dated 29.05.2017 and informed that admission to the Cinema halls is treated as supply of service and thus, directed the petitioner to get registered under the Goods and Services Tax Act. Accordingly, the petitioner got registered under the GST Act with registration No.34AAAFB3557FIZU. As per notice dated 29.05.2017 issued by the 6th respondent, the petitioner is tendering GST at the rate of 18% with respect to tickets below Rs. 100/- and 28% with respect to tickets above Rs. 100/-. The amount taxable under the GST excludes 10% maintenance charges permitted to the theater owners. 50% of GST is paid to the Central Government and 50% to the State Government. GST was introduced with a single object of "One Nation, One Tax and One Market". Contrary to the said concept and agains....
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.... of service and as per Section 15(2) of the Puducherry Goods and Services Tax Act, 2017, the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than the Puducherry Goods and Services Act, Central Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier. As per the salient features of GST, the entertainment tax is not subsumed under GST, when it is levied by the local bodies. Under Entry 62 of the State list of the Seventh Schedule of the Constitution of India, taxes on entertainments and amusements has to be collected by the Panchayat or Municipality concerned. Therefore, in view of the above constitutional provision, local bodies are entitled to levy and collect the entertainment tax. As per Section 118 of the Puducherry Municipalities Act, 1973, the Municipalities in the Union Territory of Puducherry, have power and authority to impose tax on entertainment. The entertainment tax being collected is the main source of income for the Municipalities. 4. Mr.G.Masilamani, the learned Senior Counsel appearing for the petitioner submitted a....
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....ed under Section 173(1) of the Puducherry Goods and Services Tax Act, 2017, and not annulled in toto. Collection of entertainment tax is made by the local bodies and therefore, it is not subsumed under GST. Consequential refund claim also cannot be entertained, even otherwise, since the petitioner has collected the entertainment tax already from various viewers and hence, it will not reach the persons, who paid it, even if refunded. If the petitioner is aggrieved against the impugned demand, a statutory appellate remedy is available before the concerned Appellate Authority and therefore, the present writ petition is not maintainable, even on that ground. 6. In support of his contention, the learned Government Pleader relied on the following decisions: (a) (1997) 5 SCC 744, Assistant Collector of Customs and others Vs. Anam Electrical Manufacturing Co., and others (b) (1983) 142 ITR 663, Titaghur Paper Mills Co. Ltd., and another Vs. State of Orissa and anothers 7. Heard the learned Senior Counsel appearing for the petitioner and the learned Government Pleader appearing for the respondents and perused the materials placed before this Court. 8. The point....
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....arly, when Section 173(1) of the PGST Act, omitted only Sub Clause (iii) of Clause (a) of Sub-Section 1 of Section 118 of the Puducherry Municipalities Act, 1973. In other words, it is the specific contention of the respondents that collection of entertainment tax under Sections 118 and 161 of the Puducherry Municipalities Act, 1973, is not specifically omitted under the PGST Act. 11. In order to answer the above question, it is better to look into the relevant provision of law first as referred to in this case. Article 265 of the Constitution of India commands that, no tax shall be levied or collected except by authority of law. Thus, any tax collected by any authority must have the support of law for such collection. In this case, the dispute is against the collection of entertainment tax by the 5th respondent Municipality. Chapter VIII of the Puducherry Municipalities Act, 1973, deals with the taxation. Section 118 therein deals with the taxation to be imposed. 12. Section 118(1) of the Puducherry Municipalities Act, 1973, reads as follows, before introduction of the PGST Act : "118. Taxes to be imposed.- (1) (a) Subject to any general or special order which the G....
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.... the form of additional stamp duty in accordance with the provisions of section 158; (ii) a tax on entertainments." 15. Section 161 of the Puducherry Municipalities Act, 1973, specifically deals with the tax on payment for admission to entertainment, which reads as follows: "161. Tax on payment for admission to entertainment. - The entertainments tax shall be levied on each payment for admission to any entertainment at rates the maxima and minima whereof are specified in Schedule V: Provided that in the case of cinematograph exhibition, the tax shall be calculated at the rates specified on each payment for admission after excluding from such payment the amount of the tax." 16. Section 15(1)(2) of the Puducherry Goods and Services Tax Act, 2017, reads as follows: "15. (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include- (a) any taxes, dutie....
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....ertainment tax by the Municipality stands annulled. I have given my careful consideration to the above said submission made by the learned Senior Counsel for the petitioner. I am unable to appreciate the above contention, since the same was made without appreciating the scope and ambit of Section 173 of the PGST Act in toto. I have already pointed out that Section 173(1) of the PGST Act, specifically deals with Section 118 of the Puducherry Municipalities Act, 1973, under which, only Sub-Clause (iii) of Clause (a) of Sub-Section 1 of Section 118 alone was omitted. In other words, the powers conferred on the Municipal Council to impose tax on entertainment under Section 118 has not been omitted by virtue of Section 173(1)(a) of the PGST Act. Therefore, it is to be noted that Section 173(1)(a) is a specific provision dealing with in respect of powers of Municipal council to impose tax on different heads, out of which, the only one tax viz., tax on advertisements other than advertisements published in the newspapers was omitted. Therefore, this Court is of the considered view that the general provision made under Section 173(2) of the PGST Act cannot override or include a specific pro....
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....tory position, this Court is of the considered view that the collection of the entertainment tax by the 5th respondent Municipality is within their power, competence and with authority of law. This Court is also of the view that introduction of the PGST Act has not taken away the power of the Municipality to collect the entertainment tax. To put it specifically, Section 173(2) of the PGST Act, does not debar the Municipality, in any manner, from collecting the entertainment tax from the petitioner. 20. At this juncture, it is relevant to note that collection of service tax and entertainment tax is under different enactment by different authorities. In this case, providing admission into the Cinema theater is treated as service and thus, tax on such service is collected under the GST Act. On such admission, the viewer gets the entertainment viz., Movie and thus, such entertainment being a different content, tax is levied on the same by the local authorities as "Entertainment Tax". Thus, the entertainment itself being a different content, will not fit into the act of service provided by the theater owner viz., admission of the viewer into the cinema hall. Therefore, the question o....