Amusement parks seek service tax relief

The Rs 1,500-crore amusement parks industry is likely to take up the issue of service tax and uniform amusement tax with the finance ministry.

Arijit Sengupta, president, Indian Association of Amusement Parks & Industries (IAAPI), said, “We would go to the finance ministry with a proposal to keep amusement parks out of the service tax net”.

Yogesh Donge, director, GRS Fantasy Park, a Mysore-based amusement park, said the addition of service tax would result in dual taxation for this industry.

The sector is seeking imposition of uniform as well as low amusement tax across states.
Currently, it ranges from nil in Andhra Pradesh, 5% in Karnataka, 25% in Gujarat, to as high as 40% in Punjab.

“We want the amusement tax to be kept low to attract sections from the lower economic strata. More footfalls mean more revenue, and consequently more tax mop-up for the government,” Sengupta added.

The Maharashtra government has decided to give a tax holiday for new investments in amusement parks for five years and a 50% tax holiday for the next five years.

The amusement parks sector started gaining ground post globalisation. About 20 years back, the early entrants were Appu Ghar in Delhi, Esselworld in Mumbai, Nicco Park in Kolkata and VGP Park in Chennai.

Currently, there are around 120 parks across the country, set up at an investment of about Rs 4,000 crore, and the sector is growing at 15-20% annually.