Telangana Government has decided to examine the possibility of levying entertainment tax by local bodies. The decision was taken in the light of the amendments made to the State list through the 101st Constitutional Amendment that introduced the Goods and Services Tax.
The Government has accordingly constituted a committee headed by the Chief Secretary, K. Ramakrishna Rao and comprising secretaries of all revenue earning departments to examine the issue.
The development follows the introduction of the Goods and Services Tax regime which affected the local bodies (Panchayats and Municipalities) by subsuming various local taxes like entry tax and luxury tax into the centralised GST framework. Though the GST regime restricted the direct taxing power of the local bodies, it allowed them to levy specific taxes on entertainment and amusements if permitted by the State law. Entry 62 in the 101st Constitutional amendment mentions about the taxes on entertainments and amusements to the extent levied and collected by a Panchayat or a Municipality or a regional council or a district council.
The Government has accordingly tasked the committee to explore the feasibility of levy of entertainment tax by local bodies studying the levy in different States and to provide an appropriate recommendation on the issue.
