This New Yearis going to be ‘taxing’!

In what could be a killjoy for party goers and New Year bash organisers, the Telangana government has decided to throw in a wet blanket over the celebrations. The government will charge a whopping 20 per cent entertainment tax on parties organised in the city. Hyderabad is now the second city, after Mumbai, to be charged with entertainment tax for New Year celebrations

New Year celebrations in the city are usually grand affairs with many star hotels, clubs and various organisations coming up with soirees to welcome the New Year. But this year, the number of bashes might take a toll, or organisers might get caught up in a tizzy, courtesy of the tax department. The speculation that the tax department might be slapping an entertainment tax on New Year bashes has now become official.

A release from the commercial taxes department on Saturday stated that various entertainment events that will be conducted on New Year’s Eve will be taxed. “The entertainment tax will amount to 20 per cent. Organisers must fill in requisite forms, mentioning the expected number of attendees and must tender a security deposit,” an official from the commercial taxes department said.

It was also mentioned that event managements would have to seek permission from the authority prior to hosting the event. Apart from seeking permission from the police and the Greater Hyderabad Municipal Corporation (GHMC), event organisers will have to inform the commercial tax department, register and pay the tax to organise a programme.

Back in 2012, the Maharashtra government played party-pooper by slapping 25 per cent entertainment tax on pubs, hotels and restaurants, with various hoteliers and pub-owners decrying the move. Now, it seems that the Telangana government has taken a leaf out of Maharashtra government’s book and is keen to implement the same in the city.

With an admirable entertainment market in the country, Hyderabad’s biggies like Novotel, Country Club, Playboy, Over the Moon, Hard Rock Cafe and many others, cater to a large demographic and rake in the big moolah on New Year’s eve parties. With the taxation in place, a considerable chunk of it will go to the government. While this may not be a big problem for the biggies, smaller organisers might have to bear the brunt.

“New Year’s eve is the only day in the entire year where everybody does good business. I am not against the entertainment tax but 20 per cent is way too high. The government should consider lowering the amount,” said Nishant, director, Ambrewzia Coffee Pvt Ltd.

An event organiser however showed his dissent against the move who said that there was no option but to pass on the burden to the common man. "We have been in this business for 10 years now, serving food to people. Why has the government imposed an entertainment tax this time around? On a New Year if you do light some fireworks or use psychedelic lights during the transition from the old year to the New Year, we should pay entertainment tax. How fair is that?" said the organiser who didn’t wish to be named.

"We already pay a food tax, liquor tax and this additional tax will only make the New Year eve's dinner an expensive affair," he added. Failing to comply with the rule, violators will be slapped with hefty penalties, which may amount to three to five times the original tax. The government is yet to explain the modalities of collecting the tax and indentifying the violators.