Ashwarya Sharma, Advocate | Co-Founder & Legal Head, RB LawCorp
SC Upholds Entertainment Tax on DTH: Dual Taxation Justified
In a landmark ruling (State of Kerala v. Asianet Satellite Communications Ltd., 2025-VIL-39-SC), the Supreme Court upheld the constitutional validity of State entertainment tax on Direct-to-Home (DTH) services, even when service tax was levied by the Centre. The Court relied on the aspect theory, affirming that a single activity can be taxed differently under separate legislative competencies.
Key Highlights:
- Issue: Whether States can levy entertainment tax on DTH services already taxed under the Central Finance Act, 1994.
- Assessees’ Argument: DTH services are broadcasting, falling under Union List. Dual taxation violates legislative competence.
- State’s Stand: DTH is primarily for entertainment—within Entry 62 (State List). Broadcasting (Entry 31) regulates transmission, not entertainment content.
- SC’s Findings:
- Aspect Theory allows taxation of different facets by different authorities.
- Entry 62 empowers States to tax all entertainment forms—public or private.
- Service Tax vs. Entertainment Tax are distinct in nature and purpose.
Conclusion: Despite GST subsuming most entertainment taxes, this ruling preserves States’ power under Entry 62, particularly for local body taxes, reinforcing federal tax coexistence through the nuanced aspect theory.
You can read the full article here : https://vilgst.com/showiframe?V1Zaa1VsQlJQVDA9=TVRjd01nPT0=&page=articles
[Date: 02/06/2025]
(The author is a practicing advocate, Co-Founder and Legal Head of RB LawCorp.
He specializes in GST law. Suggestions or queries can be directed to
ashsharma@rblawcorp.in. The views expressed in this article are strictly
personal.)
