The Supreme Court has issued notice to Pan India Paryatan Ltd, which runs an Essel World amusement park within Greater Bombay, on a petition filed by the Maharashtra Government.
NEW DELHI: The Supreme Court has issued notice to Pan India Paryatan Ltd, which runs an Essel World amusement park within Greater Bombay, on a petition filed by the Maharashtra Government.
A bench headed by Justice Ashok Bhan recently sought reply from the entertainment company on a petition challenging a Bombay High Court judgement, which asked the state government to calculate entertainment duty at the rate of 3.75 per cent between September 1994 and December 1994 and 7.5 per cent after December 1994.
The high court had passed the order following Pan India challenging the government's decision to recover entertainment tax at the rate of 7.5 and 15 per cent in respect of entry to the park.
Pan India alleged that the government was seeking to recover the amount under the guise of tax in violation of Article 265 and 300A of the Constitution of India, and such a levy had the effect of imposing unreasonable restrictions on its right to carry on business.
While seeking stay on the high court order, the state government said that if such benefits were given to amusement parks, the concessional rate of entertainment duty of 15 per cent would get further reduced to 7.5 per cent. This would cause loss of revenue to the state, the counsel added.
Pan India, which runs the amusement park since December 1989, charged a lump-sum amount for admission and entertainment to the amusement park and was required to pay entertainment duty for admission to the park.
Earlier, the state had given lots of financial sops and incentives for new as well as existing amusement projects under the Bombay Entertainments Duty Act 1923.
The amusement parks enjoyed full exemption from entertainment duty for a period of three years from the date of commencement and only 50 per cent duty was levied for the subsequent two years. Full entertainment duty was recovered from sixth year onwards.
However, after the state promulgated Maharashtra Ordinance XIV in 1994, a separate rate of duty of 15 per cent was prescribed for amusement parks.
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