Untitled Document

Statement of Objects and Reasons: The Entertainment Tax is presently levied and collected under Sections 4 and 5 of the Andhra Pradesh Entertainments Tax, 1939 on the basis of slab system and on the basis of gross collection capacity for each show irrespective of the actual sale of tickets. This system was introduced in the year 1984.

The Government in G.O.Ms.No.369, General Administration(I&PR.II) Department, dated 9-11-2004 have constituted a Committee to sort out the problems concerning the Film Industry. Based on the recommendations, of the Committee, executive orders were issued by the Government in G.O.Ms.175, General Administration(I&PR.II) Department, dated 2-4-2005, to the effect that the Cinema Halls situated under the jurisdiction of Municipal Corporations, Selection Grade and Special Grade Municipalities, the Entertainment Tax shall be charged on the basis of actual sale of tickets and in respect of Cinema Halls situated in other local areas, the Entertainment Tax shall be charged on the basis of existing slab system based on the gross collection capacity.

In order to achieve the above object in view, it has been decided to amend the A.P. Entertainment Tax Act, 1939 suitable.

As the Legislative Assembly of the State was not then in session having been prorogued, and it has been considered necessary to give effect to the above decision immediately. The Andhra Pradesh Entertainment Tax (Amendment) Ordinance, 2005, (A.P. Ordinance No.7 of 2005) was promulgated by the Governor on the 3rd June, 2005.

This Bill seeks to replace the above said Ordinance.

I. Short title, extent and commencement:

1.(1) This Act may be called the Andhra Pradesh Entertainment Tax (Third Amendment) Act, 2005
2. It extends to the whole of the State of Andhra Pradesh
3. It shall be deemed to have come into force with effect on and from the 4th June, 2005.

II.Amendment of section 9-A. Act 10 of 1939

In the Andhra Pradesh Entertainment Tax Act, 1939 (hereinafter referred to as the principal Act), In Section 4,-

"

Local Authority	Theatre	Rate of tax on sale of tickets
(1)	(2)	(3)
(a) Municipal Corporation	i) A/C and Air Cooled Theatres	20%
	(ii) Other Theatres	18%
(b) Selection Grade Municipality	(i) A/C and Air Cooled Theatres	20%
	(ii) Other Theatres	18%
(c) Special Grade Municipality	(i) A/C and Air Cooled Theatres	20%
	(ii) Other Theatres	18%

Explanation I: For the purpose of this sub-section "the amount collected on the actual sale of tickets" means the total amount collected on the number of tickets sold for admission to each show excluding the permissible amount of service charge collected thereon but including the element of entertainment tax

Explanation II : For the purpose of this sub-section "Municipal Corporation of Hyderabad" means any local area as notified by the Government under section 3 of the Hyderabad Municipal Corporations Act, 1955 and also includes the peripheral areas of Alwal, Rajandra Nagar and Gaddi Annaram Municipalities,

Explanation III:- For the purpoase of this sub-section and sub-section(1-A) any local area declared as a notified area and equated to that of a particular grade of Municipality under section 398-A of the Andhra Pradesh Municipalities Act, 1965, shall be deemed to be a municipality on the same grade to which the notified area is equated".;

(2) After sub-section (1), the following new sub-section (1-A) shall be added, namely,-

"(1-A) There shall be levied and paid to the State Government a tax on the Gross Collection Capacity on every show (hereinafter referred to as the Entertainments tax) in respect of entertainments held in the theatres specified in Column(2) of the table below and located in the local areas specified in the corresponding entry in Column(1) of the said table, calculated at the rates specified in the corresponding entry in Column(3) thereof for the number of shows prescribed therein for every week.

Local Authority	Theatre	Rate of tax on sale of tickets
(1)	(2)	(3)
(a) First Grades Municipality	All categories of theatres	10% of the gross collection Capacity per show multiplied by 21.
(b) Second Grade Municipality	All categories of theatres	9% of the gross collection capacity per show multiplied 21.
(c) Third Grade Municipality	All categories of theatres	8% of the gross collection capacity per show multiplied by 21.
(d) Gram Panchayats, Townships and any other local authorities;
(1) With a population of 15,000 and above	(i) Permanent and semi-permanent	7% of the gross collection capacity per show multiplied by 14.
	(ii) Touring and Temporary	7% of the gross collection capacity per show multiplied by 10.
(2) With a population of 15,000 and above	(i) Permanent and semi-permanent	6% of the gross collection capacity per show multiplied by 14
	(ii) Touring and Temporary	6% of the gross collection capacity shoe multiplied by 10.
3) With a population of less than 7,500	(i) Permanent and semi-permanent	5% of the gross collection capacity per show multiplied by 14.
	(ii) Touring and Temporary	5% of the gross collection capacity per show multiplied by 7.

Explanation: - For the purpose of this sub-section the term "Gross collection capacity per show" shall mean the notional aggregate of all payments for admission, the proprietor would realise per show, if all the seats or accommodation as determined by the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1955, in respect of the place of entertainment are occupied and calculated at the maximum rate of payments for admission as determined by the said licensing authority".