The Tamil Nadu government on Wednesday decided to impose entertainment tax on direct-to-home (DTH) service providers and the Indian Premier League (IPL) cricket matches. A Bill, which was passed unanimously in the assembly, said DTH services will attract 30% entertainment tax, while 25% tax will be levied onIPL matches. The government also decided to increase the entertainment tax on cinema tickets from 15% to 30%. 

The move to impose tax on DTH services will hurt the Sun Group as its Sun Direct is the biggest DTH player in the state; it is also among the top four players across the country, with a market share of 17%. The government's decision is also aimed at boosting the operations of the state-runArasu Cable Corporation, which was re-launched by the Jayalalithaa government to take on Sun's Sumangali Cable Vision that has a near monopoly in the state. 

"In certain states, entertainment tax has been levied on DTH service and cricket tournaments conducted by IPL. The government has, therefore, decided to include the DTH service and the cricket tournaments conducted by IPL within the definition of the term 'entertainment' and to levy entertainment tax under the act," the Bill said. Cable TV operators happy with govt move 

The government's proposal to bring DTH under the tax net has thrilled cable TV operators who have enrolled with Arasu Cable. "We welcome the government move. Since there was no restriction on DTH services in the state, some private companies dominated the industry by offering low-fare packages," Arasu Cable TV Operators Association president N Yuvaraj told TOI. "The government's move will also give a new lease of life to us," he said. 

But the film industry is not happy with the government's decision to impose tax on cinema tickets. "The government move will not affect the people. The industry will have to bear the additional burden. Currently, we pay a tax of Rs 15 to the government on a Rs 100 ticket. Once the new tax structure is implemented, we will have to pay Rs 30 for every Rs 100 ticket," sources said. 

They said industry representatives would meet the chief minister and request her to reconsider the government's decision. 

Reacting to the entertainment tax on IPL, a spokesperson of Chennai Super Kings said, "The entertainment tax is prevalent in various states and the Tamil Nadu government's legislation is on the expected lines. Therefore, Chennai Super Kings will comply by the law and follow the guidelines announced by the authorities." 

Sources close to the Board of Control for Cricket in India (BCCI) said the government's proposal to levy entertainment tax on IPL matches had not come as a surprise. "The tax will not discourage IPL fans from buying tickets," they said. (Times of India)