TMI BlogTAXATION OF AMUSEMENT FACILITIESX X X X Extracts X X X X X X X X Extracts X X X X ..... TAXATION OF AMUSEMENT FACILITIES - By: - Dr. Sanjiv Agarwal - Other Topics - Dated:- 15-10-2014 - - Meaning of Amusement facility ( Clause 9 of Section 65B ) amusement facility means a facility where fun or recreation is provided by means of rides, gaming devices or bowling alleys in amusement parks, amusement arcades, water parks, theme parks or such other places but does not include a place within such facility where other services are provided; Amusement means entertainment, diversion, pastime, sport etc. The words entertainments and amusements are wide enough to include theatres, dramatic performances, cinemas, sports and the like. YV. Srinivasamurthy v. State of Mysore, 1959 (1) TMI 24 - Supreme Court of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia . [Mysore Cinematograph Shows Tax Act, 1951, S. 3; Constitution of India , Sch. VII, List II , Entries 62, 33; List I, Entry 60 ] Toys and games...for amusements (Finance Act, 1948 (c. 49), s. 20, sched. 8, group 20) includes construction kits for making model aircraft and ships, which are nevertheless amusements even though some people may take them very seriously. (Commissioners of Customs and Excise v. E. Keil and Co., (1951) KB 469). Amusement would mean diversion, pastime or enjoyment or a pleasurable occupation of the senses, or that which furnished it. [ M. J. Sivani v. State of Karnataka. 1995 (4) TMI 284 - Supreme Court of India ]. The phrase amusement facility in the definition includes: (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fun or recreation by means of rides, gaming devices or bowling alleys and (b) places covered are amusement parks, arcades, water parks, theme parks or such other places but does not include a place within such facility where other services are provided. Rides are large mechanical devices that move people differently to create enjoyment. They are frequently found at amusement parks, travelling carnivals and funfairs etc. Game has been defined in of Pleasantime Products v. CCE [ 2009 (11) TMI 5 - SUPREME COURT] to mean as under: The word game in commercial sense means an article or apparatus used in playing games. According to Words and Phrases, Permanent Edition, the word game also defines, in certain context, ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trumentalities used in playing them. According to Stroud s Judicial Dictionary, a game is a form of play or sport especially a competitive one, played according to rules and decided by skill and chance. According to Words and Phrases, Permanent Edition, the instruments by which chance may be developed and upon which skill may be exercised are also games - such as cards, dice, balls, figures, letters, checks, etc. Therefore, in a game there is a trial of skill or chance between two or more contesting parties according to some rule(s) by which one may succeed or fail. It is a contest for success, for a trial of chance or skill and it embraces every contrivance which has for its object sport, recreation or amusement. These are the various di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctionary meanings of the word game . Applying the dictionary meaning, we are of the view that Scrabble is a board game. It is not a puzzle. Gaming Device means the object by which such games are played. In case of Roulette game, wheel and tables on which wheel is placed, is a gaming device. Gaming device is helpful in playing of games. Theme Park is an amusement park in which landscaping, buildings and attractions are based on one or more specific themes as jungle wildlife, fairy tales etc. (www. dictionaryreference.com). Meaning of Entertainment Events ( Clause 24 of Section 65B ) Entertainment events has been defined in section 65B(24) of the Act as an event or a performance which is intended to provide rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reation, pastime, fun or enjoyment, such as exhibition of cinematographic films, circus, concerts, sporting events, fairs, pageants, award functions, dance performances, musical performances, theatrical performances including cultural programs, drama, ballets or any such event or programme . No taxation being in Negative List Following two broad categories of services are in negative list (a) Admission to entertainment events (b) Access to amusement facilities These services have been included in the negative list as these are listed in the State list (S. No. 62, List II) and are under the domain of State Governments for levy of any tax on such activities. If a cultural programme, a drama or a ballet is held in open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garden or lawn and not in a theatre, it would still qualify as an entertainment event. The words used in the definition are theatrical performances and not performances in theatres . A cultural programme, drama or a ballet preformed in the open does not cease to be a theatrical performance provided it is preformed in the manner it is preformed in a theatre, i.e. before an audience. Thus, both event as well as performance shall be covered. Also, a standalone game or a ride installed in a mall will qualify as an amusement facility. A standalone amusement ride in a mall is also a facility in which fun or recreation is provided by means of a ride. Access to such amusement ride on payment of charges would be covered in the negative list ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Allowing entry to video parlours exhibiting movies played on a DVD player and displayed through a TV screen will be covered in negative list as such exhibition is an exhibition of cinematographic films. At times hotels also provide such facilities. However, membership of a club will not qualify as access to an activity of amusement. Auxiliary services provided by a person, like an event manager, for organizing an entertainment event or by an entertainer for providing the entertainment to an entertainment event organizer will not be covered in this entry. Such services are in the nature of services used for providing the service specified in this negative list entry and would not be covered in the ambit of such specified service by o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peration of the rule of interpretation contained in clause (1) of section 66F of the Act . In Tata Sky Ltd. v. State of M.P 2013 (4) TMI 373 - SUPREME COURT , it was held that an entertainment at specified place on payment of a charge will be DTH operation, which was not a place-related entertainment and as such, could not be covered in the negative list scope under clause (j) of section 66D. In Mediaone Global Entertainment Ltd. v. CCE, Chennai 2013 (7) TMI 22 - MADRAS HIGH COURT , it was held that in view of the negative list, what is not taxable is tax on admission to entertainment events or access to amusement facilities because tax on admission or entry of such events is covered in State list, which is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to levy of entertainment tax. As such, other variant modes of transactions between film distributors / sub-distributors and exhibitors of films and any revenue sharing arrangement between them is not covered under negative list of services. As per clause (j) of section 66D (negative list), admission to entertainment events or access to amusement facilities is in negative list and hence out of Service Tax net. Under entry No. 15 of exemption notification, levy of Service Tax on temporary transfer or permitting the use or enjoyment of copyright is exempted. High court held that By a combined reading of Section 66D(j) , Notification Nos. 25/2012-ST dated 20-6-2012 and 3/2013-S.T., dated 1-3-2013 (by which entry No. 15 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended), it is clear that what is exempted is only an admission to entertainment events or access to amusement facilities or exhibition of cinema in a theatre. The variant modes of transaction between the distributor/sub-distributors of films and exhibitors of movie and the revenue sharing arrangement between them are neither in the Negative List Services nor exempted. In Erotic Center BVBA v. Belgische Staat 2010 (3) TMI 1049 - EUROPEAN COURT OF JUSTICE , where assessee was running private cubicles for watching films and such cubicles were automated recreation devices in which films were started by inserting coins into a device with possibility of switching from one film to another, it was held that payment made by a custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer so as to be able to watch on his own one or more films, or extracts from films, in private cubicles does not fall within concept of admissions to exhibition of cinematographic film under section 66D(j) read with section 65B(24) and is liable to service tax. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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