Supreme Court Upholds Entertainment Tax On DTH Services For Bharti Airtel Subsidiary

The Supreme Court has dismissed Bharti Airtel arm Bharti Telemedia Ltd.'s appeal against high court judgements to levy entertainment tax on DTH services.

The top court ruled on Thursday that state legislatures and Parliament can levy entertainment tax and service tax respectively on DTH services provided to consumers.

Bharti Telemedia Ltd. had filed appeals before the Supreme Court against judgments of various high courts, which had upheld the competence of the state governments to levy entertainment tax on DTH services, according to an exchange filing by the company on Friday.

The Supreme Court, vide its judgment dated May 22, has dismissed the appeals filed by Bharti Telemedia, as per filing.

A bench of Justices B V Nagarathna and N Kotiswar Singh said broadcast was a service and liable to service tax imposed by Parliament and the activity of entertainment under Entry 62-List II in the Constitution, as per PTI report.

"The television entertainment provided by them through their modus operandi, i.e., by broadcasting, is a luxury within the meaning of Entry 62 - List II," the bench said.

The total estimated exposure pursuant to the aforesaid judgement is Rs 585 crore, which is fully provisioned in the books and against which Rs 575 crore has already been paid by Bharti Telemedia.

Bharti Telemedia is further examining the judgment and will decide the next course of action, if any.