After the Bombay high court, it was the turn of the Comptroller and Auditor General to slam the Maharashtra government over non-levy of entertainment tax on Indian Premier League matches, saying the state lost nearly Rs 5 crore on this count in 2008.
CAG also asked the state government to emulate its Delhi counterpart and consider imposing entertainment duty on the sale of tickets for Indian Premier League matches.
The IPL was conceptualised as an entertainment spectacle and was also pitched as the ultimate destination of TV entertainment, it said, adding it is thus obvious that the main objective of the IPL was to provide entertainment and hence merited levy of entertainment duty on sale of tickets.
IPL matches have considerable revenue potential and were purely commercial in nature, the CAG said. Making a strong case for levy of entertainment tax, the CAG said the franchisee owners of the eight teams comprising business tycoons and film stars spent crores of rupees to buy the teams and players from all over the world for the richest cricket tournament.
The Maharashtra government on Thursday faced tough questions from the Bombay HC over entertainment tax not being levied on IPL matches and wondered why there was special exemption especially when industrialists are involved.
"If industrialists are party to it, why special exemption is being given by the state to the IPL? This is a serious issue," the court said.
The report of the Comptroller and Auditor General of India for the year ended March 31, 2009 was tabled in the Legislative Assembly on the last day of the budget session on Friday.
On the basis of information in respect of seating capacity of the stadiums, collected independently by audit and considering the minimum rate of admission fee of Rs 500, amount of duty forgone is calculated at Rs 4.99 crore, the report said.
In 2008, ten IPL matches were played in Mumbai -- six at Wankhede and four at D Y Patil stadium, Navi Mumbai. M/S India Win Sports (pvt) Ltd was entrusted with the work of sale of tickets for these matches, the report noted and said the entertainment duty was not levied on the admission fee to these IPL matches.
The report observed that information regarding rate of tickets and number of tickets sold for different matches was called for from the government to estimate the amount of entertainment duty forgone.
The government has not furnished the information regarding number of tickets sold and aggregate amount of admission fees collected for these matches.
CAG asked the government to obtain legislative sanction for granting of exemption rather than giving it on the basis of Government Rules alone.
According to the report, the government had called for this information from the franchisee, but the franchisee did not make the information available stating that these cricket matches were exempted from payment of entertainment duty. The report said as per the issued in May 1964, all sports meetings excluding races are exempted from payment of entertainment duty.