Whether entertainment tax on DTH is the levy on “broadcasting service” inviting Service Tax?

In case of Direct-to-Home (DTH) broadcasting, service is on account of activity of transmission of signals which is received by the dish antenna for which “service tax” is levied

In case of Direct-to-Home (DTH) broadcasting, service is on account of activity of transmission of signals which is received by the dish antenna for which “service tax” is levied. The “service tax” paid under Entry 92C of List I of the Seventh Schedule of the Constitution of India is only for those services involved in the DTH platform. The taxable event for levying “entertainment tax” is the actual entertainment provided to the viewers on the television set which is based on contracts executed between the Service Providers and the customers to whom they provide entertainment by collecting subscription. The exclusive powers of legislation rest with the Parliament with respect to 97 items in List I, the State Legislatures with respect to 66 items enumerated in List II and powers in respect of 47 items in List III i.e. the Concurrent list is both with the Parliament and the State Legislatures to make laws in respect of the subjects enumerated therein. Tax items are included in List I and List II only and they are separate and independent of other subjects. Article 248 of the Constitution of India assigns residuary powers of legislation exclusively to Parliament. Entry 97 of List I, Schedule VII to the Constitution read with Article 246(1) also lays down that Parliament has exclusive power to make laws with respect to any matter not enumerated in List II or List III, including any tax not mentioned in either of those Lists. The items given in the three Lists of the Seventh Schedule of the Constitution of India are not to be read in a narrow or restricted sense. Each general word should be held to extend to ancillary or subsidiary matters. In the event of there being any apparent overlap, the Legislative Entries should be liberally interpreted and it is the duty of the Court to reconcile the entries and the competing entries must be read harmoniously and in such circumstances of overlapping, the Court has to look into the pith and substance of the legislation. Legislations in the field of taxation and economic activities need special consideration and are to be viewed with larger flexibility in approach. In the present case, it was held that Jharkhand Entertainment Tax Act, 2012 levying tax on “entertainment” through Direct-to-Home (DTH) in pith and substance, is on entertainment which falls under Entry 62 of List II of the Seventh Schedule. The levy of “entertainment tax” is different from the levy of tax on “broadcasting service” which falls under Entry 92C of List I of the Seventh Schedule of the Constitution of India. Entry 62 of State List and Entry 92C of the Union List operate in two different spheres and there is no contravention or encroachment upon the field of Union Legislation. The levy of tax on “entertainment” through Direct-to-Home (DTH) by the State Legislature is not ultravires the power of the State Legislature provided under Entry 62 of List II of the Seventh Schedule of the Constitution. “Entertainment” as defined in Section 2(m) of the Jharkhand Entertainment Tax Act, 2012 read with Section 2(k) “Direct to Home (DTH) Service” and 2(l) “Direct to Home (DTH) Service provider”, is not broadcasting service but only entertainment and State Legislature is competent to levy tax on the entertainment. [M/s. Bharti Telemedia Limited and Ors. vs. The State of Jharkhand & Ors. ] (Jharkhand HC, 30.01.2014)