SC notice to Centre, 14 states on entertainment tax on films

The supreme court has issued notice to the Centre and 14 states on a petition challenging the decisions of state governments to give tax sops to promote regional language films and charge higher entertainment tax on Hindi films.

A bench of justices SH Kapadia and Aftab Alam issued a notice to the Union information and broadcasting ministry and 14 states on a petition filed by Hindi film distribution company Aashirvad Films challenging granting of tax rebate upto 10% on regional languages films and charging 30 to 40% on Bollywood films.

Aashirwad Films said that despite the apex court's ruling that the practice was in violation of the fundamental rights to equality and freedom of speech and expression, 14 state governments were discriminating between films on the basis of language while levying entertainment tax.

The court had in 2007 ruled that such discriminatory taxes on non-Telugu films were illegal but the Andhra Pradesh government circumvented that order by introducing different slabs for films "produced inside the state" and those outside, the petition said.

Rajan Sharma, the proprietor of Aashirvad Films, said at least 14 of the 28 states levy a lower rate of tax on films produced in a favoured language of the state's choice. The favoured language is generally the official language or the dominant language spoken in the territory.