Monday, 20 January 2014

Delhi tax authority directs Hathway Cable to pay up entertainment tax

The Office of the Commissioner of Excise, Entertainment and Luxury Tax has prohibited multi-system operator (MSO) Hathway Cable & Datacom from disseminating television signals in Delhi due to non-payment of entertainment tax. 
The order issued by entertainment tax officer P K Goel states that Hathway is misleading the government in order to avoid paying due entertainment tax.

Following this order, Hathway has made part payment to stall disruption of services, a source said. 
On 8 January, the excise department had issued notice to Hathway to file its returns and deposit entertainment tax, along with interest, within seven working days. However, the MSO failed to deposit the tax following which the appellate authority issued a prohibitory order against it. 
“Considering the written submissions of the company, the department is of the view that M/S Hathway Cable & Datacom Ltd is not depositing the due tax wilfully with mala fide intention of suppression of facts leading to evasion of tax and clearly violating section 7 (1) of the Delhi Entertainment & Betting Tax Act, 1996,” the order stated. 
“Therefore, the competent authority now hereby orders for prohibition of television signals through cables of M/S Hathway Cable & Datacom Ltd under section 8(3) of the Delhi Entertainment & Betting Tax Act, 1996,” it added. 
The MSO was also directed to attend the office of the entertainment tax officer (ETO) on 16 January, following which Hathway Cable & Datacom DGM accounts Sunil Sethi appeared before the ETO. 
During the meeting, the MSO made a written submission that it was not liable to pay the entertainment tax as the billing was done by local cable operators (LCOs) who collected the subscription money from the customers directly along with entertainment tax. 
Sethi also told the ETO that it was in the process of filing a writ petition as well as a stay application against the tax demand raised by the appellate authority through its 6 January order. 
However, Hathway’s response did not cut ice with the ETO who stated that the MSO had failed to give proper justification for not depositing the entertainment tax. The ETO also stated that the MSO was in breach of the Delhi Entertainment & Betting Tax Act, 1996 and its provisions by not depositing the entertainment tax. 
In the order, the ETO also stated that the responsibility of tax collection and deposition was on the MSO which had been informed of this via a letter dated 17 December 2013.

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