Cricket is now officially an entertainment sport. Forty-five years after it declared horse racing as entertainment, the state government has decided to add cricket to the list. Besides cricket, pubs, discotheques, internet protocol television (IPTV) and permit rooms with a live orchestra (dance bars earlier) will also attract a similar tax. There are 22 discotheques in Maharashtra, of which 20 are in Mumbai city, Mumbai suburbs and Thane. Only two are in Pune.
The decision was approved by the state cabinet on Wednesday. Chief minister Ashok Chavan said, “Cricketers are making huge money and the game is also receiving immense sponsorship. Since the revenue generated is big we decided to levy the tax.’’
The matches played within the BMC’s jurisdiction will attract a 25% tax, in other civic bodies it will be 20% and in the rest of Maharashtra it will be 15%.
By levying entertainment tax on cricket matches, the state government hopes to earn Rs 5 crore this year, said officials. TOI on January 14 had carried a front-page report on the income-tax department withdrawing exemptions granted to the Board for Control of Cricket in India, saying the cricket body was not interested in promoting the game and was only focusing on commercial gains.
Chief minister Ashok Chavan said the tax was not applicable to Test matches, Ranji trophy and school cricket. The tax is applicable to all one-day international matches, IPL 20-20 cricket matches and any similar forms of the game in the future, said officials.
BCCI’s chief administrative officer Ratnakar Shetty said that the tax would ultimately be passed on to the spectators by way of ticket costs. “Even Punjab has had an entertainment tax for some time. In our case the tax would be based on the gate receipts and the tickets will now have an additional entertainment tax which would be passed on to the government,’’ he explained.
IPL chairman and commissioner Lalit Modi said the private league had no issue over paying tax. “It is not an issue at all. If there is an entertainment tax we will pay it,’’ he said.
The state revenue department does not have a figure on the number of pubs across the city and state but has nevertheless decided to include it in the ambit of entertainment tax. The 400 dance bars across the state that were closed down have been reinvented as permit rooms with a live orchestra. The entertainment bars will have to shell out Rs 50,000 per month if they are in the BMC limits, Rs 25,000 if in the jurisdiction of other municipal corporations and Rs 15,000 in the rest of Maharashtra.
“The figures for IPTV are also not available but we should be able to get these from the various telephone providers,’’ said officials. By widening the tax net the state revenue department hopes to earn another Rs 25 crore annually.
A decision to increase the betting tax on bookies, totalisater (a form of betting at the races) and mobile tote was also approved by the state cabinet. This will add another Rs 20 crore to the state exchequer. “Last year we earned Rs 283 crore. This year we hope to increase it to Rs 340 crore,’’ said officials.