Nagpur Municipal Corporation has begun preparing a fresh proposal seeking a ₹748.62 crore grant from the Maharashtra government to compensate for revenue lost after entertainment tax collection was suspended following the implementation of the Goods and Services Tax in 2017.
The move comes as the state’s temporary exemption from entertainment tax collection approaches its September 30, 2026 end date. NMC officials said the civic body had previously sought compensation but did not receive a concrete assurance from the state government.
Before GST was introduced, entertainment tax was collected by a special department under the district collector’s office. The Maharashtra government amended the Maharashtra Entertainment Duty Act on May 29, 2017, transferring collection powers to local bodies. NMC subsequently collected the tax from single-screen cinemas, multiplexes, cable connection operators and programmes held at auditoriums and cultural halls, including ticketed social and cultural events.
The tax was suspended after GST came into force on July 1, 2017. The exemption was later extended by the state cabinet on May 3, 2023, under then chief minister Eknath Shinde, until September 30, 2026. NMC’s latest proposal is intended to recover the revenue that the civic administration says it would have earned had collection continued.
Revenue figures cited by the civic administration show that entertainment tax collections by the district collectorate rose from ₹20.24 crore in 2015-16 to ₹24.01 crore in 2016-17, the last two years before the GST-era suspension. NMC estimates that annual collections could have increased to ₹28.84 crore in 2017-18 and ₹34.61 crore in 2018-19. The projected figure rises to ₹41.53 crore in 2019-20, ₹49.83 crore in 2020-21, ₹59.80 crore in 2021-22 and ₹71.76 crore in 2022-23.
The estimates place potential annual revenue at ₹86.11 crore in 2023-24, ₹103.34 crore in 2024-25, ₹124 crore in 2025-26 and ₹148.80 crore in 2026-27. On this calculation, the cumulative amount sought by NMC reflects the projected loss over the period rather than a single year’s tax collection.
The civic body had initiated a similar effort around three years ago. Then municipal commissioner Abhijeet Chaudhari wrote to the state government seeking compensation, but the proposal did not result in a confirmed grant, according to the report.
“Entertainment tax was a major source of revenue for NMC. The grant, if provided, would bring financial relief for the civic body and help overcome fund constraints for development works,” said Milind Meshram, officiating additional municipal commissioner.
The proposal places the state government at the centre of a funding decision involving the division of revenue responsibilities between the state and the municipal corporation. NMC’s next step is to send the fresh proposal to the Maharashtra government for consideration. The amount and timing of any grant will depend on the state’s response.
