Watching movies in a theatre will now be costlier in Kerala as the 10% entertainment tax came into effect on Tuesday. The tax will be collected by local bodies- Corporations, Municipalities and Panchayats.
The government had scrapped entertainment tax levied by local bodies when the Good and Services Taxes (GST) came to force in July 2017. But section 3 of the Kerala Local Authorities Entertainment Tax Act that empower the local bodies to collect entertainment tax was not done away with it.
However, in January, the state government announced a 10% ‘entertainment’ tax on tickets in the budget. Finance Minister Thomas Isaac while announcing the decision had said that the government followed Tamil Nadu which levies both an ‘entertainment’ tax and GST and decided to do the same.
It is estimated that with this the price of each ticket will rise between Rs 10 and 25. It will be levied in addition to the current 18 % GST on tickets. The government order in this regard came on Monday with the direction to implement with immediate effect.
“Prior to GST, entertainment tax in Kerala was collected by local bodies. After GST, the government decided to do away with local body tax to avoid double taxation. But then the GST was slashed from 28% to 18% and many states such as Tamil Nadu are imposing double tax. Therefore, we have now decided to allow local bodies to collect this 10% entertainment tax,” Thomas Isaac had said.
With the rollout of GST, a blanket slab of 28% tax was levied on tickets above Rs 100 and 18% on tickets below Rs 100. The Central government in 2018 decided to slash GST slabs effective from January 1, 2019.