KOCHI: Urban local bodies in the district are suffering huge revenue losses after the scrapping of entertainment tax to avoid double taxation on cinemas under the GST regime.Kochi Corporation, Kalamassery and Maradu municipalities where major multiplexes are situated are the worst affected. Local bodies used to levy a 25 per cent entertainment tax on cinema tickets. The Kochi Corporation has been getting Rs 11 crore to Rs 13 crore from these theatres and other events conducted in big hotels in the city.
“The corporation received Rs 13 crore as entertainment tax during last financial year. Though not confirmed, the state government may permit local bodies to levy 10 per cent tax based on the previous fiscal year’s total entertainment tax collection. However, the government is yet to hold dialogues with them on compensating the income loss,” he said. In Kalamassery, where the biggest multiplex in Kochi and a star hotel is located, the civic body’s annual entertainment tax collection is Rs 5 crore.
“The municipality has to identify other sources of revenue generation. Otherwise, implementation of projects using own funds will be affected,” she said. Meanwhile, the Maradu municipality which has a multiplex and couple of star hotels in its area will lose more than Rs 1 crore. “Major entertainment programmes are being conducted at the star hotels on a regular basis which is a major revenue source of the municipality. With the abolition of entertainment tax, the civic body has intensified measures to increase income generation from other sources. Notices have been already served to tax defaulters,” said P. A. Abdul Jabbar, municipal vice-chairman.
