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Informist, Monday, Sept. 15, 2025

 

NEW DELHI – Dismissing a petition by Big Tree Entertainment Pvt. Ltd., the Supreme Court Monday upheld the Maharashtra government's levy of entertainment duty on convenience fees charged by online ticketing platforms and movie theatres for booking movie tickets online. The bench of Justices B.V. Nagarathna and R. Mahadevan said that they were not inclined to interfere with the Bombay High Court's Aug. 6 order. On Sept. 4, the apex court had dismissed a similar petition by FICCI-Multiplex Association of India against the same high court order.

 

The petitioners had challenged the insertion of a provision in Section 2(b) of the Maharashtra Entertainments Duty Act, 1923 by the state government in 2014. This provided for a levy of entertainment duty on convenience fees exceeding INR 10 by online ticketing platforms and movie theatres for virtual booking.

 

The petitioner said that they had paid service tax under the Finance Act, 1994, on the "convenience fees" charged on online ticket booking. According to the petitioners, Section 66B of the Finance Act, 1994, provides for a negative list on which service tax is not payable, and clause (j) of the said section refers to admission to entertainment events or access to amusement facilities. 

 

Since the transaction of providing convenience for booking tickets online is the subject matter of the Finance Act, 1994, which is occupied exclusively by Union List I of Schedule to the Constitution of India, the state government cannot levy entertainment duty by the impugned proviso, said the petitioners. Under Article 246 of the Constitution of India read with Entry 62 of List II to the Schedule, the state government is empowered to levy tax on entertainment and receipt of convenience charges for online ticket booking does not fall within the term 'entertainment' and, therefore, the state is not competent to levy duty on the same, the petitioner added.

 

According to the petitioners, charging "convenience fees" was not a condition for attending entertainment, but it was a facility given to a customer to book the ticket without coming to the theatre and standing in a queue. They said that there was no direct connection between the charging of "convenience fees" for online ticket booking and entertainment, and therefore, entertainment duty should not apply to such a transaction. 

 

The high court held that the online ticket booking charges are directly connected with buying a ticket for entertainment without which a person cannot enter the theatre. The distinction sought to be made within the entertainment area and outside the entertainment area is superfluous, said the high court. "The online ticket booking charges, in our view, would squarely fall within the provisions of Section 2(b)(iv) (1923 Act) and therefore, there is no justification in submitting that the state legislature does not have the competence to insert the impugned proviso," the court added.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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