Axe On Amusement Parks

The roller-coaster ride could cost you a little more from next year. The government is working on a proposal to levy service tax on amusement parks and coin operated amusement machines in the Budget 2008-09.

The committee of state finance ministers has recommended imposition of service tax on three out of the 44 new services, including healthcare, education and amusement parks. This is among the 44 new services which were offered to states as a part of a compensation package to phase out of central sales tax.

It was felt that imposing service tax on healthcare and education services could be against the development and would also be difficult because of political reasons. However, an imposition of a 25% service tax plus cess on amusement parks would not be considered very drastic. This levy of service tax will however not affect the small service providers having annual turnover less than 8 lacs as they will be exempt from tax.

The policy makers might feel that higher amusement park charges will not have any major affect but the young ones have a different view.

Rachit a ten year old says, “There should be no taxes for amusement parks. Increased charges to amusement parks will make my parents more reluctant in taking me there.”

Asit Sinha, a parent said, “The charges to amusement parks are already very high. If the government levies a tax on it, the park owners will pass the burden on to the public thereby making the charges even higher.”

An executive of an amusement park in Kolkata said “The amusement park industry in India is at an embryonic stage. The rising real estate prices, construction costs, operation costs and shortage of trained manpower have already started eating into our profits. There is no national player in the industry till date. We would expect the government to think of some incentives instead of a service tax.”

Had there been voting power in the hands of the young ones, there could have been a different take on this issue. Tax or no tax the queues in front of the amusement parks will always remain unending since it remains obvious that no kid will ever be able think of any replacement for the amusement parks, when asked for an outing.

Namit Agarwal