The issue relates to subsuming of entertainment tax into GST which deprived the company of the entertainment tax incentives it was promised by the state government and the corporation.
Adlabs
Imagica — which has theme and water parks in Maharashtra and is
owned by Adlabs Entertainment — got relief from the Bombay High
Court on Friday in a case relating to denial of entertainment tax
incentives post GST.
Abhishek
Rastogi, the petitioner’s counsel, said the court ordered that a
committee be formed with representatives from the Maharashtra
government and the Maharashtra Tourism Development Corporation, and
that the committee come out with a report on extending entertainment
tax benefits to the company.
The
committee will determine the methodology for extending the benefits
to Adlabs Imagica
The
issue relates to subsuming of entertainment tax into the goods
and services tax (GST) which deprived the company of the
entertainment tax incentives it was promised by the state government
and the corporation.
Entertainment
tax collected from visitors used to be transferred to the company to
incentivise it for its investments under the older tax regime in
accordance with the tourism policy of the state, 2006. The two parks
were promised Rs 8 billion of incentives till 2023-2025.
Hence,
the company moved the court, saying it should continue to get the
benefits under the doctrine of legitimate expectation and promissory
estoppel.
The
doctrine of promissory estoppel allows a party to recover the benefit
of a promise made even if a legal contract does not exist.
Similar
cases are also being litigated in other states. Courts in Allahabad
and Jodhpur have also given relief to petitioners, Rastogi said.
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