10% entertainment tax on theatre but 25% on comedy shows

Not feasible to do shows in Gurgaon now, say stand-up comics
Stand-up comics have recently discovered that they are subject to 25% ent tax instead of the usual 10% for theatre, in Haryana. This poses a serious threat to Gurgaon’s edge over Delhi in the stand-up scene, they say.
Comedian Papa CJ recently took to social media to express his shock when he saw the receipt of his last show in Gurgaon.According to it, the entertainment tax on stand-up comedy shows has been increased to 25% in Haryana, while for cultural activities like plays, musical concerts, dance and fashion shows, it is 10%. Reacting on why stand-up comedy is not included in the same category as theatre and other stage shows, comedians say they fail to see the logic behind keeping the two in separate categories of entertainment, especially in Gurgaon, which is the hub of comedy acts in NCR. Comedians, who also organize shows, tell us that though many artistes are unaware of this, it had come into effect about six months ago. However, entertainment tax officials told GT that this demarcation has existed since 2010. So, how is it that most performers remained oblivious of the fact? One reason could be that tax officials have only now begun a crackdown on those acts which fail to pay the proper entertainment tax. We spoke to artistes to understand how higher tax has affected the comedy scene in the past few months.
Not feasible to do shows in Gurgaon anymore:
Papa CJ tells us, “The reason comedians have done so many shows in Gurgaon in the past, is because for a certain fee, venues like Epicentre look after some of the administrative elements also. However, after stand-up comedy has been thrown into the 25% entertainment tax bracket, it has drastically reduced the feasibility of performing in Haryana. If the venue takes 50%, the entertainment tax is 25%, marketing, promotion and production costs have to be incurred, and then a 10% TDS has to be deducted before we are paid. It leaves little incentive for artistes to consider putting up any show. Even if its a full house, the effort is often not worth the minimal financial return.”
Delhi will become a better revenue-making option:
Comedian Abijit Ganguly found out about the 25% tax four months ago when it showed on his invoice. He says, “Most of the money a comedian makes does not come from public shows but corporate gigs, college shows and other assignments. Public shows anyway pay less.”
However, the tax has been there since 2010, say officials.
According to a notification in 2010, the ent tax applicable on cinema is 30% and 25% tax is levied on others. Theme parks, amusement parks and plays have to pay 10% tax. This isn’t new and has been there since 2010 – Balraj Singh, entertainment tax officer.
We have been receiving complaints that stand-up comedy acts haven’t been paying entertainment tax. We are planning to crack down on such practices– Vandana Chaudhary, deputy excise and taxation commissioner (passenger and goods tax), Gurgaon.
“But now, of course, whatever paltry amount we were making through public shows will also get affected. It is a typical case of ‘gareebi mein aata geela’. Frankly, the timing is a little suspicious, since it happened around the time the AIB Roast controversy occurred. So it might be a way of getting back at the whole comedy community. Otherwise, I don’t really see any point in treating stand-up comedy differently from regular plays or theatre shows. I also think that the difference in the entertainment tax is one of the prime reasons that comedy has not taken off in Noida, because, to the best of my knowledge, the amount is 40% over there. Now, for comedy organisers, Delhi, where the entertainment tax for both theatre and stand-up is 15%, becomes a better revenue-making option than Gurgaon,” adds comedian Abijit Ganguly.
Stand-up comedy should be in the same category as theatre:
Sorabh Pant says, “We’re being put in a bracket that is separate from theatre, which is silly. Stand-up should be in the same genre as theatre, especially when you realise that it’s basically a dramatised monologue. We love taxation in India, but that’s a cynical attitude. Currently, stand-up doesn’t have a separate identity. People don’t realise that stand-up shows are as popular as theatre. Because of the 25% entertainment tax, you have to price your tickets even higher. I recently did a show called Travelling Pants 2.0 back to back in Gurgaon and Delhi, and had a couple of people show up for my show in Delhi instead of Gurgaon because of the price difference.”
Comedians will move to cities which have lower tax rates:
Nishant Singh Tanwar says, “The comedy scene took off in South Delhi, but almost 80% of the acts now take place in Gurgaon. I, as a comedian, already pay 10% TDS and 14% service tax and now, I’ll have to pay 25% entertainment tax in Gurgaon as well. All I can make out from this is that the government doesn’t want people to have fun. What’s next? Selling my kidney to perform in Gurgaon? Most of the comedians that I know from the city have moved to other states like Karnataka because there are cheaper shows and therefore, more opportunities there.”
Difficult to get artistes from other cities to perform in Gurgaon Amit Tandon, a regular performer and organizer of shows in Gurgaon’s comedy scene, says, “We weren’t left with much to pay artistes who we called from outside Delhi to perform here to begin with, but now, the situation has become worse in the past few months. A lot of good stand-up comedians are from other cities and people want them to come to Delhi and Gurgaon and perform. How is 25% entertainment tax only on stand-up comedy going to encourage comedians from other cities to come and perform here?”
High tax rates will discourage international comedy acts:
Kunal Rao says, “Local producers find it difficult enough to bring in foreign artistes at a profitable rate. Most of my producers have talked about how difficult the tax procedure is. We need to relax the guidelines if artistes are to be encouraged to perform. Low tax rates draw artistes to a city and, as a result, also help the tourism industry. This is the kind of long-term thinking that the government needs to do. There are already very few producers of comedy in India and that number will only reduce in Gurgaon. Comedians will pass over Gurgaon to perform big shows in states that are more entertainment-friendly. In the long term, the state is only shooting itself in the foot.”
Sorabh adds, “Bengaluru is probably the only Indian city where international comedians perform frequently because it’s profitable. The rest of the cities put an even higher tax for international acts, which has very little logic in it.”
Most comedians are unaware of the 25% entertainment tax:
Abijit explains why most comedians, who are regulars at the Delhi and Gurgaon stand-up comedy scene, were unaware of the new tax. “This is something that will most likely come to the attention of comedians who organize shows, apart from just performing at them. They are the ones who get a chance to look at the invoices from venues,” he tells us.
When we spoke to comedians like Neeti Palta and Atul Khatri, they told us that they had no clue about the increased tax rates. Neeti says, “I don’t know when this came into effect. In a country struggling with over-population, the authorities find it practical to beep out the word ‘condom’ from TV serials, and now they’ve made spreading laughter more expensive. Do you really want to discourage people who make Gurgaon-waasis laugh from doing so? I know if I’m going to get paid less than what I’m already making in pub shows, I would naturally prefer focusing on corporate shows instead.”
Epicentre is only a venue, and has no say in the matter:
Mukta Kapoor, corporate head, marketing and communication, Epicentre, tells us, “We follow the rules and regulations laid down by the excise department and we have no say in the matter. We, as a venue, have to follow the tax laws and don’t decide anything on our own.”
Balraj Singh, entertainment tax officer, says, “The Punjab Entertainment Duty Act, 1955, divides entertainment activities into three slabs – the first includes cinema halls and multiplexes, the second category covers entertainment options like musical concerts, theme parks, amusement parks and plays, and the final category includes the stand-up comedy performances. According to a notification in 2010, the entertainment tax applicable to cinema is 30%, while the third category has an entertainment tax of 25%. Finally, theme parks, amusement parks and plays have to only pay 10% entertainment tax. This is not something new – it has been there since 2010.”
Vandana Chaudhary, deputy excise and taxation commissioner, PGT (passenger and goods tax), Gurgaon, says, “We are following what the Punjab Entertainment Duty Act states. Stand-up comedy acts happen at various venues across the city and we have been receiving complaints that they haven’t been paying entertainment tax. We are planning to crack down on such practices. If we decide to conduct an inspection and find that the concerned people have flouted the norms, they will have to pay 25 times the value of the tax. We want to tell people that they should pay the applicable tax rate and follow the rules.”