February 2017


In India, entertainment tax is levied on every financial transaction that is related to entertainment. This includes not only live entertainment shows & movie tickets, but also on the monthly Cable TV and DTH bills. In fact, today India has more than 100 million Cable TV & DTH homes. These contribute a large share of the total entertainment tax collected.


It is interesting to review the origin of Entertainment Tax.

Pre-independence, the British government levied huge taxes on events centred on entertainment or amusement. The aim was to discourage the the aggregation of people which could spark off public rebellion, in a politically sensitive time. The tax has still been retained today, as a source of income for the states!


Entertainment Tax is levied, collected and retained by each state.

Hence the state is the discretionary authority for determining the entertainment tax levied within its boundary.

As a result, entertainment tax varies radically, from state to state. These details are summarised in Table-1.

Entertainment Tax ranges from an absurd 110% in Jharkhand, to zero in 5 states.

There is No Entertainment Tax On Cable TV In Tamil Nadu


Some states also provide specific concessions on Entertainment tax on particular categories of entertainment. Most states levy a concessional rate for state language movies, to encourage the local industry. Tamil Nadu state set up its state owned Aarasu Cable TV Corporation to deliver cable TV at concessional prices to consumers. To minimise the cost to consumers, Tamil Nadu state vide its order dated 27 March 2008, has exempted "cinematograph film exhibited on Television Screen through Cable Television Network and television exhibition, from liability to entertainments tax."


The centre is now moving towards a uniform tax regime, across the country. Indian citizens in various states will be levied the same GST for most categories of products and services.

GST will also subsume entertainments tax.

GST is planned to be levied in 3 slabs. It remains to be seen what level of GST will be levied on Entertainment. n