Madras HC order set to bring IPL into tax net

The Madras High Court has directed the Tamil Nadu government to amend the Tamil Nadu Entertainment Tax Act, 1939, to bring sports matches including Indian Premier League (IPL) under its purview. This would lead to a drop in the ticket rates for IPL matches drastically.

It may be noted that earlier this year, the Maharashtra government decided to levy tax on all cricket tournaments, including the T20 league.

In an order on a public interest litigation filed by social activist Sakthi Vasan, asking for levy of entertainment tax and restrict ticket prices of IPL matches in the state, Chief Justice M Y Iqbal and Justice T S Sivagnanam gave four weeks to the state government to make the necessary changes.

Meanwhile, the Commercial Taxes department, through a letter dated July 13, 2011, informed the Madras High Court that the state government would go for an amendment of the Tamil Nadu Entertainments Tax Act, 1939, to include sports.

Inclusion of league matches under the Entertainment Tax Act is expected to bring down ticket prices drastically. Of the total ticket cost, Vasan said, 23 to 28 per cent would go to the state government.

In his petition, Vasan also said the government should fix a tariff rate for the tickets, which would make it affordable to common people. At present, the tickets are sold at Rs 500 to Rs 25,000 per head, he said.

The Act currently restricts the entertainment tax on tickets ranging from Rs 5 to Rs 125 per ticket, mostly of movie and other theatre arts.

However, his plea to restrict the matches to day time in view of the increasing electricity shortage has not been addressed by the Court, since the opposition informed that they rely on power generators for the day and night matches.