The Supreme Court ruled that both the Centre and States can tax TV broadcasting, but on different aspects.
The Centre can charge service tax on the broadcasting service itself under the Finance Act, 1994.
The State can charge entertainment tax on the content delivered to viewers, like cable TV.
These are two separate taxes on different parts of the same activity, so there is no overlapping or conflict.
Broadcasting is seen as a service (taxed by the Centre), while entertainment is seen as a luxury (taxed by the State).
The court said the term “entertainment” should be interpreted broadly, as it now includes modern forms like streaming on phones, smartwatches, etc.
This judgment clarifies that technology-driven entertainment can be taxed appropriately by different governments, without violating the Constitution.
COMMENTS