Thiruvananthapuram corporation fears GST may hit entertainment tax kitty

Thiruvananthapuram: Thiruvananthapuram Corporation officials are worried the civic body will lose a hefty amount from its annual revenue because of GST, even though the state government has assured that the loss will be compensated for. Every year, the Corporation here collects an annual revenue of around Rs 10 crores, levied as Entertainment Tax from movie theatres. The state has issued a government order according to which the state will pay Corporations 15 per cent more than the average annual revenue collected as entertainment tax for three years. The finance minister has assured that there will be an increase in 15 per cent every year.

At the outset, this looks like a fair deal. However the actual potential of entertainment eax revenue was likely to have been much higher, according to LSGD principal secretary T.K. Jose. “This year, the entertainment tax might have even doubled as we were in the process of motivating local bodies to push for online ticketing systems. In online systems, the tax is automatically deducted, whereas in the manual ticketing system, theatre owners could have been showing less than half of the actual revenue. We realised this when Kalamassery municipality, where Lulu Mall stands, got a huge income from entertainment tax, with no additional effort from their side,” he says.

The compensation might be less than what the local bodies could have been earning. corporation secretary Deepa L.S. says, “When local governments were entrusted with collecting entertainment tax as per Local Authorities Entertainments Tax Act 1961, the entire amount was our revenue. This was close to Rs 10 crores as per last year’s annual financial statement. We have received a government order saying that the revenue will be compensated for from the general purpose grant. However we are not sure if this would be proportional to the huge income we could have earned.”