KERALA LOCAL AUTHORITIES ENTERTAINMENTS TAX ACT, 1961

S.1 Short title, extent and commencement

       (1) This Act may be called the Kerala Local Authorities Entertainments Tax Act, 1961.
        (2) It extends to the whole of the State of Kerala.
        (3) It shall come into force on such date as the Government may, by notification in the Gazette, appoint.

S.2 Definitions

       In this Act, unless the context otherwise requires?
        (1) ‘admission’ includes admission as a spectator or as one of an audience and admission for the purpose of amusement by taking part in an entertainment;
        (2) ‘admission to an entertainment’ includes admission to any place in which the entertainment is held;
        (3) ‘agriculture’ includes horticulture and breeding of animals of every description;
        (4) ‘entertainment’ includes any exhibition, performance, amusement, game, sport or race to which persons are admitted for payment; [2] [but does not include any magic performance]
        (5) ‘institution’

S.3 General provision regarding the levy of tax and the rate of tax

Any local authority may levy a tax (hereinafter referred to as the entertainments tax) at a rate [6] [not less than twenty four percent and not more than forty eight per cent on each price for admission to any entertainment.”.]
[7] [“Provided that the rate thus fixed shall not be lower than the sum of the entertainment tax levied under this section and additional tax on entertainment levied under the Kerala Additional Tax on Entertainment and Surcharge on Show Tax Act, 1963 (22 of 1963) prevailing in the area prior to the date of commencement of the Kerala Decentralisation of Powers Act, 2000.”];

S.3(a) Entertainment tax on seating capacity

Notwithstanding anything contained in sections 3 and 4, a local authority may levy entertainment tax based on seating capacity in the manner prescribed.”

S.3(b) Entertainment tax for amusement parks

       (1) Notwithstanding anything contained in sections 3, 3A and 4 and subject to such rules as may be made by Government in this behalf, a proprietor of an amusement park shall pay an annual entertainment tax fixed by the local authority within the range of rates specified against each category, namely:-

       Category

       Range of rates of entertainment tax to be fixed by the local authority.

       (1)
        (2)


       CATEGORY A
       Amusement park having an inv

Legal Commentary on Section 3(b) of the Kerala Local Authorities Entertainments Tax Act, 1961

Introduction

Section 3(b) of the Kerala Local Authorities Entertainments Tax Act, 1961, pertains to the imposition of entertainment tax specifically for amusement parks, establishing the framework for taxation and related provisions within such establishments.

What does Section 3(b) Say

Section 3(b) mandates that amusement parks are liable to pay an entertainment tax on each performance or admission, with specified rates and provisions for relaxation or installment payments as determined by local authorities. It also provides for exemption and rules regarding the collection and payment of such taxes.

Essential Ingredients

Levy of entertainment tax specifically on amusement parks.
Tax payable per performance or per admission.
Provision for relaxation of the rate of tax (e.g., 60% in the first year, 40% in the second year).
Authority of local bodies to permit installment payments.
Rules for exemption and payment procedures.
Penalty provisions for default or breach.

Scope of Section 3(b)

The section applies exclusively to amusement parks within Kerala, establishing the obligation to pay entertainment tax on each performance or admission. It also empowers local authorities to regulate, relax, or exempt certain categories, ensuring flexibility in enforcement.

Punishment for Section

Violations related to the payment of entertainment tax or breach of rules may lead to penalties, including fines that may extend up to one hundred rupees, as per the Kerala Local Authorities Entertainments Tax Rules [Source: "Kerala Local Authorities Entertainments Tax Rules"].

Legal Comments

"Tax Imposition" - Section 3(b) authorizes local authorities to levy entertainment tax specifically on amusement parks, establishing a clear statutory obligation. [Source: "Section 3B in Kerala Local Authorities Entertainments Tax Act, 1961"]
"Rate Specification" - The section provides for differentiated rates, including relaxation periods (e.g., 60% in the first year), allowing for phased implementation. [Source: "Section 3B(1)"]
"Payment Terms" - Local authorities may permit payment of entertainment tax in equated monthly installments, facilitating compliance. [Source: "Section 3B(1)"]
"Liability" - The liability to pay tax arises on each performance or on each person admitted for payment, ensuring comprehensive coverage. [Source: "Section 3B"]
"Exemptions" - The Act allows for exemptions with prior sanction from the government, providing flexibility for special categories or events. [Source: "ACT 20 OF 1961"]
"Rules for Collection" - The Rules prescribe that entertainment shall be held only on payment of the fixed sum or as specified, and taxes are to be collected along with admission fees. [Source: "Kerala Local Authorities Entertainments Tax Rules"]
"Penalty Provisions" - Breach of rules or non-payment can lead to fines, with penalties up to one hundred rupees, enforceable by magistrates. [Source: "Kerala Local Authorities Entertainments Tax Rules"]
"Rule-Making Authority" - The government has the power to prescribe rules for exemptions, collection procedures, and penalties, ensuring administrative flexibility. [Source: "ACT 20 OF 1961"]
"Scope of Relaxation" - The section allows relaxation of tax rates during certain periods, encouraging promotional activities or easing financial burdens. [Source: "Section 3B(1)"]
"Administrative Discretion" - Local authorities have discretion to exempt or permit installment payments, balancing revenue collection with operational flexibility. [Source: "Section 3B(1)"]
"Legal Enforcement" - Penalties for violations are enforceable through magistrate courts, ensuring legal compliance. [Source: "Kerala Local Authorities Entertainments Tax Rules"]
"Amendments and Notifications" - The Act and its rules are subject to amendments, such as the 2012 and 2013 Bills, which may modify rates or scope of taxation. [Source: "Kerala Local Authorities Entertainments Tax (Amendment) Bill, 2012"]
"Tax Collection Mechanism" - The cess levied under the Act is collected along with admission fees, ensuring integrated collection processes. [Source: "© THE KERALA LOCAL AUTHORITIES ENTERTAINMENTS TAX"]
"Legal Basis for Rules" - The rules are framed under the powers conferred by the Act, providing a statutory basis for operational procedures. [Source: "Kerala Local Authorities Entertainments Tax Rules"]
"Scope of Taxation" - The Act covers all entertainments in Kerala, with specific provisions for amusement parks, circuses, cinemas, and other entertainment forms. [Source: "Section 3"]
"Exemptions and Special Classes" - The government can specify classes or places exempted from tax via notifications, allowing targeted exemptions. [Source: "the kerala local authorities entertainments tax (amendment) bill, 2012"]
"Legal Authority" - The section and related rules derive authority from the Kerala Local Authorities Act, 1961, ensuring statutory backing. [Source: "India Code"]
"Legal Enforcement" - Violations are punishable, ensuring compliance through legal sanctions. [Source: "Kerala Local Authorities Entertainments Tax Rules"]

Note: The analysis is based on the provided sources, emphasizing the statutory provisions, administrative mechanisms, penalties, and scope related to Section 3(b) of the Kerala Local Authorities Entertainments Tax Act, 1961.

S.4 Composition and consolidated payment of tax

On the application of the proprietor of any entertainment in respect of which the entertainments tax is payable under section 3, the local authority may, subject to such rules as may be made by the Government in this behalf, compound the tax payable in respect of such entertainment for a consolidated payment.

S.5 Admission of persons to entertainments subject to tax

       (1) Save in the cases referred to in section 4, [10][and section 6A] no person shall be admitted for payment to any entertainment [11] [where the price for admission is subject to entertainments tax] except ?
        (a) with a ticket stamped with an impressed, embossed, engraved or adhesive stamp issued by the local authority indicating the proper tax for such ticket; or
        (b) in special cases, with the approval of the local authority, through a barrier which, or by means of a mechanical contrivance which, automatically registers the number of persons admitted,
        unless the proprietor of the entertainment has made arrangements approved by the local authority for furnishing returns of the payments for admission to the entertainment

S.6 Manner of payment of tax

       (1) The entertainments tax shall be levied in respect of each person admitted for payment, and in the case of admission by ticket, shall be paid by means of a ticket referred to in clause (a) of sub-section (1) of section 5, and in the case of admission otherwise than by ticket, shall be calculated and paid on the number of admissions.
        (2) The entertainments tax in the case of admission otherwise than by ticket shall be recoverable from the proprietor.
        (3) Where [12] [on the price for admission] to an entertainment is made wholly or partly by means of a lump sum paid as a subscription or contribution to any institution, or for a season ticket or for the right of admission to a series of entertainments or to any entertainment during a certain period of time, the entertainments tax shall be p

S.6(a) Entertainments tax on dramatic and circus performances

       (1) Notwithstanding anything contained in sections 3 and 6, the entertainments tax leviable by a local authority?
        (a) on dramatic performances to which persons are admitted for payment shall be [14] [hundred rupees] on each performance; and
        (b) on circus performances to which persons are admitted for payment shall be [15] [sixty rupees] on each performance.
        (2) The tax referred to in sub-section (1) shall be recoverable from the proprietor of the dramatic performance or circus performance, as the case may be.
        Explanation.?For the purposes of this section, the expression “dramatic performance” means any play, pantomime or other drama.

S.7 Entertainment exempted from payment of tax

       (1) The entertainments tax shall not be levied on payments for admission to any entertainment where the local authority is satisfied?
       (a) that the entertainment is of a wholly educational character; or
       (b) that the entertainment is provided for purposes which are wholly or partly educational, cultural or scientific by an institution not conducted or established for profit; or
       (c) that the entertainment is provided by an institution not conducted for profit and established solely for the purposes of promoting public health or the interests of agriculture or a manufacturing industry, and which consists solely of an exhibition of articles which are of material interest in connection with questions relating to public health or agriculture, or of the products of the industry for promoting the int

S.8 Manner of recovery of tax and fines under the Act

(1) Any amount due on account of the entertainments tax may be recovered by the local authority in the same manner as any tax payable to the local authority.
(2) Any fine imposed under this Act or rules or bye-laws made thereunder shall be recovered in the manner provided in the Code of Criminal Procedure 1898, for the recovery of fines and shall on recovery be paid to the local authority concerned to be applied for the general purposes of such authority.

S.9 Inspection by Local Authority

(1) [19][The Director of Municipal Administration or the Director of Panchayats or the Mayor of a Corporation or the [20] [Chairperson of the municipality or President of the village panchayat] or any officer authorized by the [21] [Government] or the local authority concerned or any police officer authorised by the Government in this behalf] may enter any place of entertainment while the entertainment is proceeding and any place ordinarily used as a place of entertainment at any reasonable time, with a view of seeing whether the provisions of this Act or any rules made thereunder are being complied with.
(2) If any person prevents or obstructs the entry of [22] [any officer authorised by or under sub-section (1)], he shall, in addition to any other punishment to which he is liable under any law for the time being in force, be liable on conviction before a

S.10 Penalty for non-payment of tax

(1) If any person is admitted for payment to any place of entertainment and the provisions of section 5 are not complied with, the proprietor of the entertainment to which such person is admitted shall, on conviction by a Magistrate, be liable in respect of each such offence to a fine not exceeding [25][two thousand rupees] and shall in addition be liable to pay any tax [26] [including escaped-tax] which should have been paid.
[27] [“Explanation.?The Term “escaped tax” shall mean and include any amount of tax detected or revealed to have been not paid or to have escaped assessment on a verification by the licensing authority or an authorised officer and calculated or assessed with details collected during his inspection or enquiry. Such assessment shall be presumed to be correct unless the assessee produces sufficient proof to rebut the calculation of the escaped tax.”

S.11 Power of the Government to make rules

       (1) The Government may make rules to carry out all or any of the purposes of this Act, not inconsistent therewith.
        (2) In particular and without prejudice to the generality of the foregoing power they may make rules ?
        (a) for the composition and consolidated payment of tax under section 4; and
        (b) for the presentation and disposal of applications for exemption from payment of the entertainments tax.
        (3) In making any rules the Government may provide that a breach thereof shall be punishable with fine which may extend to one hundred rupees.
        (4) All rules made under this Act shall be laid for not less than fourteen d

S.12 Power of Local Authority to make bye-laws

       (1) Any local authority may make bye-laws not inconsistent with this Act or any rules made thereunder ?
        (a) for the supply and use of labels or stamped or embossed tickets or for the stamping or embossing of tickets sent to be stamped or embossed and for securing the defacement of labels when used;
        (b) for the use of tickets covering the admission of more than one person and the calculation of the tax thereon and for the payment of the tax on the transfer from one part of a place of entertainment to another and on payment for seats or other accommodation;
        (c) for controlling the use of barriers or mechanical contrivances (including the prevention of the use of the same barrier or mechanical contrivance for p

S.13 Repeal and Savings

The Travancore-Cochin Local Authorities Entertainments Tax Act, 1951 (Act VI of 1951) and the Madras Entertainments Tax Act, 1939 (Act X of 1939) as in force in the Malabr District referred to in sub-section (2) of section 5 of the States Reorganisation Act, 1956 (Central Act 37 of 1956) are hereby repealed:
Provided that any notification, order, rule or bye-law issued or made under the repealed Acts, shall, so far as it is not inconsistent with the provisions of this Act, continue in force and be deemed to have been made or issued under the provisions of this Act, unless and until it is superseded by any notification, order, rule or bye-law made or issued under this Act.