Allow Cookies!
By using our website, you agree to the use of cookies
On 26th Aug, Supreme Court held that all kinds of musical programme is exempted from Gujarat entertainment tax even if they are performed for commercial purposes i.e for profit making.
In a case Gypsy Pegasus Ltd. Vs. State of Gujarat before the bench consisting of Justice Ranjan Gogoi, Justice R Banumati and Justice Navin Sinha, reinterpreted Section 3A of Gujarat Entertainment Tax Act and refused the interpretation made by the Gujarat High Court. The court observed that High Court could not have imposed the requirement only for the educational, cultural or charitable purposes for such exemption.
In the instant case Gypsy Pegasus Ltd. managed an event of live concert in Ahmedabad and Entertainment tax sought to be levied on gate receipts of the concert. The event manager approach the High court contending Section 3A exempts them from payment of the sought tax as Section 3A envisages: “All kinds of musical programmes including musical nights and opera”.
However, Gujarat High Court made note of section 29 of the Act, which exempt from payment of entertainment tax upon the fulfillment of condition precedent, that is, one of which is that the entertainment must be provided for educational, medical, cultural, charitable, or such other purpose. Therefore, Gujarat High Court dismissing the writ petition held that “If they are performed in commercial manner and for profit making and which has no element of educational, medical, charitable, philanthropic or such other purposes, are not entitled to exemption from payment of entertainment tax like musical concert performed in the present case which has commercial element and the sole purpose is for profit making and all those activities mentioned in Schedule III shall be entitled to exemption from entertainment tax if there is an element of educational, medical, charitable, philanthropic or such other purposes and element is non-commercial and non-profit making. Therefore, the submission on behalf of the petitioner that for all the activities / entertainment mentioned in Schedule III irrespective of whether they are performed for commercial purpose or not and / or there is a commercial element on such activities / entertainment, they shall be exempted from payment of entertainment tax cannot be accepted.”
In an appeal before the apex court, the state contented that section3A purports make exemption in consonance with section 29 of the Act and that musical concert would not be a musical event as it is not a “musical work”. However, apex court whilst rejecting the contention held that “Section 3 of the Act is the charging section whereas Section 3A of the Act makes certain forms of entertainments non-taxable. If a form of entertainment is not taxable under Section 3A of the Act we do not see how the requirement of exemption and necessity to conform to the requirement of exemption can apply to a non-taxable form of entertainment.”
The bench has also made note of Finance Minister’s speech made while introducing the Act and set aside the High Court by saying that “If that is so, we can find no substance in the arguments advanced on behalf of the State; neither can we agree with the reasoning of the High Court. The High Court could not have imposed the requirement of the entertainment to be for educational, cultural or charitable purpose when the form of entertainment in question is included in Schedule III to the Act.”
86540
103860
630
114
59824