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Taxation on entertainment,cable and DTH services shall come down under the Goods and Services Tax regime as the 'entertainment tax' levied by states has been subsumed in the GST, the government said today.
Currently, states impose entertainment tax of up to 100 per cent in respect of exhibition of cinematography films in theatres/cinema halls.
Under GST, the entertainment tax has been subsumed, and hence only the taxeslevied by a panchayat or municipalityon entertainments and amusements will continue.
"Thus, entertainment services shall suffer a lower tax incidence under GST. In addition to the benefit of lower headline rates of GST, the service providers shall be eligible for full input tax credits (ITC) of GST paid in respect of inputs and input services," the ministry said.
With regard tocircus, theatre, Indian classical dance including folk dance and drama, the GST rateis 18 per centad valorem.
Further, the GST Council has approved an exemption up to a consideration for admission of Rs 250 per person.
These services currently attract entertainment tax levied by the states, the statement said.
"Presently, such service providers are not eligible to avail of input credits in respect of VAT paid on domestically procured capital goods and inputs or of Special Additional Duty (SAD) paid on imported capital goods and inputs," the statement added.
Thus, while GST is a value added tax, entertainment tax, presently levied by the states is like a turnover tax, it added.
The government has estimated that the incidenceof taxes on smartphones, medicaldevices and cement will come down post GST rollout from July 1.