NEW DELHI: Private direct-to-home (DTH) service providers have been given a time of two weeks by the Supreme Court to file their replies to the affidavit filed by the State of Madhya Pradesh in a dispute over levy of entertainment tax on DTH service providers.
Tata Sky, Sun Direct, Bharat Business Channel Ltd. (BBCL) and Bharti Telemedia Limited (Airtel) have challenged the state government’s decision to levy entertainment tax.
The private operators claim that they are service providers and are already paying service tax and levying entertainment tax on them is against law. They contend that paying entertainment tax even after paying service tax is like paying tax twice for one service.
Earlier, the Jabalpur bench of Madhya Pradesh High Court had dismissed the appeal by the private operators and held the levy of entertainment tax as valid.
The Supreme Court division bench comprising Justice Aftab Alam and Justice R M Lodha is hearing an appeal against this High Court order.
Yesterday, the First Bench of the Gujarat High Court directed Tata Sky and other DTH service providers to deposit entertainment tax for July-September 2010 quarter with the state government.
A Bench comprising Chief Justice S J Mukhopadhaya and Justice Akil Kureshi directed Tata Sky, Dish TV, Bharat Business Channel Limited and Bharti Telemedia to deposit the tax due before January 17. The case was listed for 14 February for final hearing.
The petitioner companies approached the high court challenging the amendment to the Entertainments Tax Act by the government which enables the state to levy entertainment tax on the companies for broadcast of entertainment channels.
The state government in 2009 levied entertainment tax of Rs 200 per annum for each DTH connection in the state with Gujarat reportedly having about 300,000 such connections. State Finance Minister Vajubhai Vala reportedly had said the tax was levied to remove discrepancy vis-?-vis the houses connected with cable connections. They were reportedly paying Rs 80 million per annum. Vala had said levy of entertainment tax would net Rs 60 million additional revenue for the state.
