Convenience at a Cost: Bombay High Court Upholds Tax on Online Ticket Booking Fees.


06-August-2025 Civil Writ Petition >> Civil & Consumer Law  

In 2015 and 2016, there were two different groups that knocked on the doors of the Bombay High Court. One was the Association of Multiplex Theatres, and the other consisted of online ticket booking service providers. 

They shared a common grievance: the State of Maharashtra had modified the Maharashtra Entertainments Duty Act, 1923, in December 2014 by adding a proviso. The modification aimed at imposing entertainment duty not only on ticket rates but also on "convenience fees" levied for advance bookings of tickets online.

The present case of FICCI-Multiplex Association of India, New Delhi & Others v/s State of Maharashtra, through the Government Pleader, Mumbai & Others, the owners of multiplexes and online service providers regarded this as unjust. They contended that the convenience charges were not included in the entry fee for viewing a movie. Rather, it was an additional, optional service provided for the convenience of customers. For instance, while a ticket at the counter was priced at Rs. 100, purchasing it online was Rs. 120 — Rs. 100 for the ticket and Rs. 20 as convenience fees. The State now wished to include the extra Rs. 20 as "payment for admission" and impose entertainment duty upon it.
 
 

The petitioners' counsel urged that these fees were already liable to service tax in terms of the Union's Finance Act, 1994, and hence the State had no right to tax them again. They contended that online booking was just a technical facility, not "entertainment" per se. By referring to it as "payment for admission," the State was stretching the ambit of its taxing powers artificially. A few Supreme Court and High Court decisions were quoted to demonstrate that convenience charges could not be compared with entry into an entertainment event.

The State of Maharashtra, on the other hand, vigorously defended its amendment. The State clarified that service providers were overcharging customers in the name of internet handling fees. To avoid exploitation, the law then permitted not more than Rs. 10 as convenience charges to be kept out of the ambit of entertainment duty. Any excess would be levied as part of admission. Convenience fees, the State argued, were inextricably connected with purchasing tickets for entertainment — pay them and one could not get an online ticket. They were therefore squarely a part of "payment for admission."

The Court scrutinized the petitions. The judges remarked that although the service providers were objecting, they had also not revealed important agreements with theatre owners that might explain convenience fee sharing. The judges commented that the nature of entertainment duty itself was associated with entry into cinemas, and the convenience fee was a prerequisite when booking online. Thus, it was related to entertainment.

The Bench held that the amendment did not impose a new tax but simply changed the method of measurement of tax to encompass convenience fees in excess of the threshold limit. The State's power under Entry 62, List II of the Constitution, was maintained. The petitions questioning the validity of the amendment were ultimately rejected.

Therefore, what started off as a war among multiplexes, ticketing websites, and the State concluded with the Court ruling in favor of the Government: convenience charges on online reservation, over the stipulated limit, could actually be taxed as part of entertainment admission.


MAHARASHTRA ENTERTAINMENTS DUTY ( I OF 1923) (AMENDMENT) ACT, 2014