‘Maha revenue dept lax in collection of entertainment tax’

Even as the state is grappling with a debt of Rs3.4 lakh crore, the revenue department is apathetic towards levy and recovery of entertainment tax worth crores from amusement parks, water parks and entertainment centres, according to the comptroller and auditor general of India’s (CAG) report on the revenue sector for the last fiscal that ended on March 2015.

The CAG has scrutinised the records of six amusement parks and 23 water parks from seven districts. A case in point could be the entertainment tax dues of Pan India Paryatan Private Limited, proprietors of Essel World and Water Kingdom amusement parks, which amount to Rs11.35 crore, as the firm has stopped paying the tax since July 1, 2008, says the report. The firm had paid entertainment tax of Rs25.83 crore, at the rate of 15%, between January 13, 1995 and March 15, 2007. However, the Bombay high court held the company should have paid entertainment tax for the period at the rate of 7.5%, bringing the amount to Rs12.92 crore and so it was entitled to a refund of Rs12.91 crore. The high court verdict was challenged by the state in the Supreme Court, but the firm stopped paying entertainment tax in the wake of the high court ruling, says the report.

Despite repeated attempts, the authorities at Pan India Paryatan were not available for comment.

According to the B forms submitted by the company, entertainment tax at the rate of 7.5% from July 1, 2008 to April 2, 2015 amounted to Rs24.26 crore. Even after deducting a refund of Rs12.91 crore, the company is liable to pay Rs11.35 crore, excluding the interest. The revenue department has only been issuing notices to the firm, the CAG observed.

In case of two amusement parks — Fariya’s Resorts Lonavala and Pushpal Amusement Nigdi, Pune -- the entertainment tax was recovered at a rate of 10%, instead of 15%, which resulted in recovery of Rs8.33 lakh less between 2010 and 2015, the CAG report stated.

The CAG report states nine entertainment centres such as discotheque, video game parlours and orchestra bars have been conducting business by taking licences from the Mumbai police, but have not been paying the entertainment tax. The collector issued notices to these centres only after it was pointed out by the CAG, the report said.