Supreme Court upholds Maharashtra's entertainment duty on online ticketing and convenience fee

Recently, the Supreme Court (SC) has upheld the validity of the Maharashtra government's levy of entertainment duty on the convenience fees charged by online movie ticket booking platforms. It has also dismissed the challenges brought by the platform BookMyShow and other similar platforms. The bench led by Justice B.V Nagarathna and Justice R. Mahadevan ruled that the convenience fee is the part of the “Overall consideration paid for entertainment,” thus falling within the scope of the Maharashtra Entertainment Duty Act. The court observed that “The duty is not confined merely to the base ticket price, but extends to any charge that is integrally linked to the act of availing entertainment.”

BookMyShow and other platforms have argued that the convenience fee was a fee charged for providing an easy booking facility using technology and not a fee levied on entertainment itself. The court noted that “When a consumer books a movie ticket online, what he seeks is access to entertainment. Any ancillary charge paid for that access cannot be divorced from the taxable event.” The court also stated that the Entertainment duty falls directly under Article 12 of the Constitution (State) and observed that “The State legislature is empowered to impose entertainment duty not only on the core ticket price but also on incidental charges forming part of the entertainment transaction.” 

This clarifies that the convenience fee charged on the entertainment duty is taxable under the act. Legal authorities have also confirmed that this judgment affirms the state's “Fiscal Authority” in the evolving economy. The Maharashtra Government accepted the verdict, stating “the duty is a legitimate and equitable levy”. Right now, the online platforms are likely to reassess their charges in compliance with the verdict.