Mumbai: The Maharashtra government lost Rs 5 crore by sparing the Indian Premier League (IPL) from paying entertainment tax, said the Comptroller and Auditor General on Friday.
The CAG report also asked the state to emulate the Delhi government and consider imposing entertainment duty on the sale of tickets for IPL matches.
“The IPL was conceptualised as an entertainment spectacle and was also pitched as the ultimate destination of TV entertainment”, it said. “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 Friday faced tough questions from the Bombay High Court 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 CAG report 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.
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