Cineplex owners may move SC over subsuming of entertainment tax into GST

Cineplex owners are claiming that the UP government promised to allow multiplexes retain a portion of entertainment tax for 5 years but now the tax has been subsumed into GST.

Cineplex owners are planning to move the Supreme Court over the issue of subsuming entertainment tax into the goods and services tax (GST) that did away with some states withdrawing incentives given to these players. This is despite the fact that the Allahabad High Court on Tuesday gave one month’s time to the Uttar Pradesh government to clearly state its position on the issue.

The players had moved the high court in July 2017. “It has been a year now, but the issue is being dragged with no final order coming. We are planning to move the Supreme Court now,” Abhishek Rastogi, who argued the case in the high court, said. 

The cineplex owners had gone to the high court on the ground that the Uttar Pradesh government promised to allow multiplexes and cine malls retain a portion of entertainment tax for five years, on the basis of investments they make, but that was broken after the tax was subsumed into GST. 

However, after the GST roll out, these benefits have been taken away. 

They had challenged the new tax on the principle of promissory estoppels, which is a legal principle that says that if a party changes his position substantially in a promise, then other party can enforce the promise although the essential elements of a contract are not present.