The Uttar Pradesh government has decided to refund the state goods and services tax (SGST) imposed on mutliplexes and cinema theatres.
In an order, the government has allowed the owners, who were part of grants-in-aid incentive schemes, to get these refunds, which would be made within a month of depositing the SGST with the department. The incentives were given to make up for investments made by the owners in the state.
The move, they said, enabled the state to renege on its promise to allow them to keep the entertainment tax collected from cinemagoers for five years under the incentive schemes.
Abhishek Rastogi, counsel of the petitioners and partner at Khaitan & Co, said the petitions would be suitably amended to claim refund of CGST as well.
“The quantum of benefit is limited as only the state government has announced the refunds. Most of the multiplexes have invested huge money," he said.
Rastogi said the second round of litigation will soon start in Allahabad high court and its Lucknow bench after doing appropriate number crunching.
Similar petitions were filed in Jodhpur high court and its Jaipur bench in Rajashtan and Mumbai high court in Maharashtra.