Maharashtra Govt and the MSO-LCO entertainment tax tussle

The Maharashtra government has issued a circular asking all local cable operators (LCOs) in the state to pay their entertainment tax directly to district collector in the interim till the Bombay High Court or the Nagpur High Court takes a final call on the issue. 

However, the state government has added a condition whereby LCOs have to provide a joint affidavit with multi-system operators (MSOs) to pay their entertainment tax. 

It is pertinent to note that the government had issued a circular on 7 March directing MSOs to pay entertainment tax. The government’s move was met with stiff resistance from the LCOs who saw it as a ploy to deny them legality as the owner of last mile customers. 

Traditionally, the LCOs have been collecting entertainment tax from end customers and paying it to the government, though there was a huge under-reporting of the actual subscriber base. However, the government wanted MSOs to pay entertainment tax since it does not want to deal with thousands of LCOs. 

Irked by the move, the LCOs led by Maharashtra Cable Operators Federation (MCOF) and Nashik District Cable Operators Federation (NDCOF) moved Bombay High Court seeking a stay on the state government’s decision to allow the MSOs to pay entertainment tax. 

The Bombay HC passed an interim order by staying the government order till a final outcome in the case. The HC also asked the LCOs to deposit entertainment tax either with the court or the collectorate. 

Even as the interim order is still in force, the state government came out with the new order asking LCOs to pay entertainment tax to the collectorate till such time as the HC takes final call in the matter. 

The state government also said that it was working on amending section 4(2)(b) of the Entertainments Duty Act, Bombay 1923. 

Cable operators, however, smell a rat in the government’s decision to allow LCOs to pay entertainment tax only in the “interim”. They also feel that the government’s insistence on a joint affidavit by LCOs and MSOs is totally uncalled for. 

“The MSOs and LCOs are two separate entities, so they should be allowed to make separate affidavits,” the head of a cable operators body contended. 

“The government is discriminating against the LCOs by allowing us to pay entertainment tax for a limited period,” he rued.

Source: http://cablequest.org/news/digitization-news/item/3531-maharashtra-govt-and-the-mso-lco-entertainment-tax-tussle.htmlSource: http://cablequest.org/news/digitization-news/item/3531-maharashtra-govt-and-the-mso-lco-entertainment-tax-tussle.html