Madras HC stays levying entertainment tax on DTH

The Madras High Court has stayed a Tamil Nadu government decision to levy 30 per cent entertainment tax on direct-to-home services in the state. A single-judge bench issued the order in response to a petition filed by Dish TV, the country’s largest DTH operator.

The Noida-based satellite television firm was aggrieved about a Bill the state administration recently passed, levying a 30 per cent entertainment tax on DTH operators from September 27 this year. That led Dish TV to move court, contending that such levy was discriminatory. It argued that the cable netwrok was exempt from such entertainment tax levy -- and claimed that the legislation was in violation of Article 14 of the country’s constitution.

On Thursday, Justice Chitra Venkatraman, after hearing the case Justice, ordered the Department of Entertainment Tax to not initiate further proceedings, and issued it a show-cause notice. The judge permitted said the petitioner shall furnish the tax returns, but said there shall be no recovery of any amount.

Dish TV “shall deposit the security amount in cash, that is 50 per cent of the tax liability of a month”, the order added.

The 2004-founded company hailed the order. “Entertainment tax is a burden on the common man,” said Jawahar Goel, its managing director. “For him, viewing TV is the cheapest form of entertainment and information.”