GST Exemption: Bombay HC Asks Union Govt To File Reply in Adlabs' Petition
Moneylife Digital Team 03 February 2022
The Bombay High Court (HC) has asked the Union government to file an affidavit-in-reply in a writ petition filed by Adlabs Entertainment Ltd, seeking upfront exemption in goods and services tax (GST) leviable on its theme park and water park at Khalapur in Maharashtra. 
The division bench, comprising justice RD Dhanuka and justice NR Borkar, observed that the following recommendations from the high-level committee appointed by the HC, the state government released part of the amount due to Adlabs.
"The Union government has however, neither released any amount due to the petitioner, nor has even bothered to file an affidavit in reply to the petition," the HC pointed out in its order issued last week.
The bench then asked the Union government to file an affidavit in its reply indicating whether they also are agreeable to pay the amount of CGST (Central GST) on the line of recommendations made by the high level committee or not, and if not, then why so. 
The HC also granted to Adlabs the liberty to file a copy of the 14th finance commission's report for consideration of the bench in support of the submission regarding sharing of the GST between the Union and state governments. The matter is listed on the board for admission on 1 March 2022.
Earlier, the Bombay HC had requested the government to constitute a high level committee composed of the principal secretary of finance and secretary of the tourism department for granting relief to Adlabs. 
Adlabs had set up theme and water parks and had enjoyed waiver of entertainment tax, considering the fact that assessees granted such a waiver of entertainment tax leviable at 15% on account of heavy capital investment, is now required to pay 18% GST.
Seeking an extension of GST incentives for the period of lockdown due to the COVID pandemic, Adlabs had filed a petition before the Bombay HC. In its plea, the company stated that its water and theme parks remained shut during 2020 and 2021 due to the lockdown forced by the government. "This period should be excluded from the tax holiday and the exemption period should be extended by the number of lockdown days," it had said.
Adlabs says, "(We should be) granted an 'up-front exemption from 100% of GST leviable on sale of the goods to the theme park and water park adopted by the petitioner at Khalapur and also a refund of the GST already paid by the petitioner till date.” 
After theatres and multiplexes approached the courts, several states like Uttar Pradesh, Maharashtra, Haryana, West Bengal, Tamil Nadu and Karnataka extended the sops, including a waiver of entertainment tax for up to five years.
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