MUMBAI: The Rajasthan government has declared 100% exemption on entertainment tax to all theaters in the state.
The exemption was made effective from 9 March, 2011. After Punjab, Rajasthan is the second state, which is now exempt from entertainment tax.
As of March 2009, the Rajasthan government levied entertainment tax of 23.08 per cent on gross and 30 per cent on nett. The government had reduced the entertainment tax from 40 per cent on nett to 30 per cent on nett in 2008.
Entertainment tax structure in India varies across states and is the highest in the state of Uttar Pradesh at 60 per cent. In Maharashtra, entertainment tax was reduced by five per cent in 2005 and now stands at 45 per cent.
Indian film producers and distributors have been crying their woes to the government regarding the multiple tax structure that the film industry faces and entertainment tax has been its greatest grouse. The Rajasthan government’s new decision on entertainment tax exemption is sure to bring some amount of relief to the industry.
