No tax relief for concerts

Not only did the High Court (HC) deny tax relief to the Mehli Mehta Music Foundation for the Zubin Mehta concerts which it is organizing at Bombay’s National Centre for the Performing Arts on March 30 and 31, 2011, there was a very real fear that the maestro would not be able to keep his tryst with Bombay as he was touring Japan along with the Florence orchestra when the earthquake and tsunami hit that unfortunate country. However, after some nervous moments, the Foundation released a press note confirming the dates, reported The Times of India (TOI) on March 17, 2011.

Mehroo Jeejeebhoy, trustee of the Foundation told TOI that she spoke to Mehta two days after the earthquake. He had performed a concert in Tokyo the day after disaster struck. Panic set in after the nuclear emergency was declared and "it was difficult for them to get flights.” They were scheduled to fly from Tokyo to Taipei on March 17 and then on to Shanghai, Jeejeebhoy told TOI.

Earlier the Foundation petitioned the HC after the government failed to accept its plea seeking exemption from paying entertainment tax, reported TOI on February 22, 2011. The secretary of revenue and forest department of the Maharashtra government ruled on February 17 that the petitioner is liable to pay entertainment tax under Section 12 of the Bombay Entertainment Act as the government had amended the Act on January 31, 2001. The order passed by the secretary stated that the "Foundation is likely to receive Rs 2.43 crore from the sponsors and Rs 66.09 lakh as entrance fee for the concerts, which shows that the concerts are not organized for charity work.”

A HC divisional bench of Justices D. K. Deshmukh and K. K. Tated who heard the matter on February 21 suggested that the state government could ask the organizers to donate the profits from the sale of tickets to a charitable cause nominated by it, TOI reported. Fredun DeVitre, counsel for the Foundation, explained to the HC that "the sponsorship and entrance fee amount cannot be calculated as profit because it will be spent on meeting lodging and boarding and travel expenses of 130 members performing in the concert... The orchestra members are not charging fees to perform. However, the travel expenses and cost of accommodation may exceed the amount earned from sponsors and entry fee. We are not earning any profit,” as per the TOI report.

Government pleader Dhairyasheel Nalawade’s argument was that only tickets costing less than Rs 100 are permitted exemption, and entry charges for these concerts are Rs 1,000 to Rs 5,000, as per the TOI of February 23. DeVitre told the HC, "The concerts are a source of funds for the trust. We are ready to give an undertaking that the funds will be used for the purpose of charity and philanthropy.” It was after the Foundation rejected the HC’s suggestion that it could give away the collection earned from the concerts to a charity suggested by the state government that the Court directed it to pay the tax. While refusing interim relief, the HC observed that the matter of payment of entertainment tax will be subject to the petition’s final outcome, reported TOI.