KOCHI: Kochi Mayor Soumini Jain has urged the state government to reinstate the right of urban local bodies to collect entertainment and advertisement taxes taken away after the GST (goods and services tax) rollout. Urban local bodies are in an unprecedented financial crisis due to the loss of a major source of revenue, Ms Jain pointed out in a release. States like Kerala, Tamil Nadu and Gujarat are directly levying entertainment tax as per Local Authorities Entertainment Tax Act while in other, the governments are collecting the tax and sharing a fixed percentage with the local bodies.
"As per the 101st amendment to the Constitution, entertainment tax directly collected by local bodies has been exempted from the GST regime, and this has been specifically mentioned in the State list (7th Schedule). Hence, the State government should reinstate the right of local bodies to levy entertainment tax," the mayor said. She also sought to reinstate the Kerala Municipality Act, section 271, based on which the urban local bodies are levying advertisement tax on advertisers.
The state government has exempted it in the latest Kerala GST Act -2017 following which hundreds of advertisers erected billboards in the city without remitting the tax to the local body, noted the mayor. On an average, the Kochi Corporation has been getting Rs 13 crore as entertainment tax and Rs 2.5 crore as advertisement tax every year. "Tamil Nadu government has recently reinstated the right of local bodies to collect entertainment and advertisement tax by enacting Local Authorities Entertainment Tax Act-2017. Like this, the state government should also cancel the order issued on June 24, 2016, abolishing the urban local bodies' right to collect entertainment and advertisement taxes," she added.