Goa: Event organizers upset with entertainment tax on free passes
The imposition of entertainment tax on free passes distributed by organizers for major events is a dampener for tourism in Goa, industry stakeholders have said. "Why should there be a tax on free passes being distributed for favors," asked Savio Messiah, president, TTAG, a union of tour operators. According to government, entertainment tax on such passes is imposed under Goa Entertainment Tax Act, 1964.
Messiah questions the tax system on free passes
The Travel and Tourism Association of Goa (TTAG) chief further explained, "Sometimes you give free passes out of obligation as part of the contract. But here in Goa, state authorities demanding free passes is becoming a regular feature when big events are held."
Free passes have become important to get permission: Messiah
Messiah added that, unfortunately, free passes have become an incentive for the state government to give permission for events. Messiah, ex-president of Goa Football Association, said this practice of taxing free-passes is also taking place for football tournaments. "As per one contract, the organizers had to give 1,000 free passes for every match. This is wrong when you're paying for the stadium," he said.
Messiah says free passes are also being misused, re-sold
Messiah said he had raised the issue at the state Tourism department's State Level Permission Committee meetings, adding that several complimentary passes are also being misused and re-sold. "The tourism industry is worried as it's contributing to organizers shying away from holding events," he added.
The 1964-Act mentions how complimentary tickets can be taxed: Official
While Goa Tourism Minister Manohar Ajgaonkar and Tourism Director Menino D'Souza couldn't be reached, a senior tourism department official said the 1964 Act mentions complimentary tickets issued by organizers can be taxed. "There's an exception to this rule that allows the state to use its discretion and allow exemption on tax on complimentary passes if they don't exceed 5% of total capacity," he added.
Organizers claim free-passes given to over 7% of crowd-strength
Several organizers, however, claimed free passes given out are much more than 7% of the crowd capacity. "We want to follow the law and pay all charges, fees, and taxes, but tax on free passes is absurd. We have no option but to fight this injustice," said Manuj Agarwal, Chief Executive Officer, Percept Live, the organizers of Sunburn Electronic Dance Music Festival.
Sunburn paid over Rs. 8 crore in taxes from 2011-2015
"Sunburn was organized in Goa from 2007-2015. For all these events, Sunburn has paid full entertainment tax on all tickets sold and also on complimentary passes," Agarwal said, adding in 2011-2015, Sunburn had paid over Rs. 8cr in taxes. "For all these years, there was no dispute on ticket sales. From 2012, the state's Commercial department started levying tax on free tickets," he mentioned.
