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In an effort to increase entertainment tax collections from
cable operators, the Maharashtra government has announced
that it will collect duty on cable television through public
auction from 2002-03.
State
finance minister Jayant Patil, while presenting the state's
budget yesterday said: "Given the constraint of manpower,
entertainment duty payable on all cable connections cannot
be collected. Therefore, with a view to reduce expenditure
on recovery and to increase revenue, I propose to collect
entertainment duty on cable television by public auction
from the financial year 2002-03. The Bombay Entertainments
Duty Act, 1923 will be amended suitably."
This
is yet another attempt by the state government to bring
tax collection in line with the actual number of cable connections.
Maharashtra is estimated to have crossed 6 million cable
TV homes but government records reveal only 2.5-2.6 million
connections.
The
govenment will auction the right for collecting taxes to
private parties for recognised territories, it has been
reported. The chosen party will collect tax from the local
cable operator. However, as bidding cannot be done without
adequate research the government is hoping that the private
party's effort would make tax collections truer to the actual
number of cable connections.
Cable
operators see this as another move that could adversely
impact the cable television industry in the state and complain
that it appears to support broadcasters.
Meanwhile, in a related move, Patil further announced in
his budget that he would be revising rates of entertainment
duty leviable on discotheques and would include sponsorship
amount of fashion shows and other events in the tax base.
For this proposal also, the Bombay Entertainment Duty Act
will require amendment.
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