State of Kerala & Another Vs Asianet Satellite Communications Ltd. & Others (Supreme Court of India)
Supreme Court of India on May 22, 2025, affirmed the constitutional validity of the Kerala luxury tax imposed on cable television services. The ruling came in the case of State of Kerala & Another Vs Asianet Satellite Communications Ltd. & Others, where the apex court allowed the State of Kerala’s appeal, asserting the state’s legislative authority to tax cable TV under Entry 62 of List II (State List) of the Constitution, classifying it as a “luxury.”
The bench, comprising Justices BV Nagarathna and N Kotiswar Singh, addressed the intricate constitutional challenges surrounding the imposition of this tax. The central issue revolved around whether cable television services constituted a “luxury” subject to state taxation and if there was a constitutional overlap with the service tax levied by the Parliament on broadcasting services.
No Conflict with Central Service Tax
A key clarification from the Court was that the service tax imposed by the Finance Act on broadcasting services, legislated under Entry 97 of List I (Union List), does not conflict with state taxes on entertainment. The Court observed that Parliament’s imposition of service tax is on the service rendered by the broadcasting agency, while state legislatures levy tax on entertainment as a luxury. This distinction, the Court stated, avoids any constitutional overlap between central and state levies.
