A recent order by the Authority of Advance Ruling in India has rejected a challenge to its level of tax on FECs in the country by Namco.
According to the Times of India, the rate of Goods and Services Tax for amusement and theme parks is set at 18 per cent but entertainment centres in malls attract a higher levy of 28 per cent.
The AAR held that “gaming zones” in malls such as the FEC operated by Namco in the Oberoi Mall, Goregaon, Mumbai, do not constitute amusement parks but are amusement “facilities,” therefore the reduction in GST that parks enjoyed following the reduction to 18 per cent in January 2018 does not apply.
The assertion by Namco was that the definition “amusement park” includes the games and rides provided by it and that the term “game” as defined in the Explanation to Bombay Entertainment Act includes those operated electronically as well as mechanically.
The Maharashtra bench of the AAR however, ruled that “amusement park” refers to a large open area of land containing various amusement facilities, whereas FECs simply operate “various gaming machines and equipment for different age groups that interested customers could use,” therefore the tax rate of 28 per cent should still stand.
