‘Online booking charges’ by a cinema hall owner besides the ‘Cost of ticket’ is not part of taxable receipt for the purposes of levy of Entertainment Tax under 'Tamil Nadu Entertainment Tax Act 1939', a division bench of Madras High Court has ruled.

The matter here involves PVR Limited (previously known as SPI Cinemas Private Limited). The company owns and operate cinema hall (single screen and multi screens) in various parts of the country. It went in appeal before division bench against an order given by Single judge in February this year, which had dismissed the writ petitions filed by the company and held that the entire price of the ticket when booked online through the Web Portal of the cinema owner would be fall under Entertainment Tax as per the provisions of the Tamil Nadu Entertainment Tax Act.

A separate facility

The Division Bench observed there is no doubt that booking of a cinema ticket on online basis is not a mandatory condition for all cinema goers, and this is not only optional but altogether a separate facility provided to all on the Web portal of the cinema hall owners.

The Bench stressed on the section of the Act defining ‘Payment for admission’. This provision {clause 3(7)(c)} says, “any payment for any purpose whatsoever connected with an entertainment which a person is required to make as a condition of attending or continuing to attend the entertainment in addition to the payment, if any, for admission to the entertainment,” to be part of ‘Payment for admission.’

The Bench said this provision will have to be read in conjunction and not without the context of the words. Further, these words are not superfluous or without meaning and in fact, they provide the bedrock condition for applying particular provision.

“Unless such a conditional payment for any purpose is integrally connected with the entertainment is uniformly and mandatorily chargeable from all, who want to have entry in the place of cinema hall, in our opinion, Section 3(7)(c) cannot cover such payment made by the customer, for availing the facility of online booking of tickets,” it said.

According to the Bench, while the service of internet booking itself is not only outside the realm of Entertainment Tax Act as such, but is independent and optional service provided by the cinema owner. “It is neither mandatory nor uniformly applicable to all,” the Bench said while adding if one opts for the online booking, he will have to pay something extra. But that has nothing to do with the gaining of the entry into the cinema hall for which one separately pays price for a ticket like paid by all others who buy their tickets at the counter of the cinema hall, the Bench said while setting aside single judge order.