NMC seeks Rs 748.62 crore from state as compensation for entertainment tax lost after GST
The Nagpur Municipal Corporation says it lost entertainment tax revenue after GST came in 2017 and has renewed its demand for a grant from the Maharashtra government.
Nagpur: With pressure mounting on its finances, the Nagpur Municipal Corporation (NMC) has again asked the Maharashtra government for a grant of Rs 748.62 crore. The civic body claims that collection of entertainment tax stopped after GST was introduced in 2017, and that its revenue suffered as a result. It wants the state government to compensate for the loss.
The temporary exemption from entertainment tax expired on September 30, 2026. The civic administration has since begun preparing a fresh proposal for the state government. About three years ago, the then municipal commissioner Abhijeet Chaudhari wrote to the state government seeking compensation for the loss of revenue, but no firm assurance was received.
Entertainment tax was earlier collected by a special department under the district collector. In preparation for GST, the state government amended the Maharashtra Entertainment Duty Act on May 29, 2017, which moved the power to levy and collect the tax to local self-government bodies.
The NMC then became responsible for collecting entertainment tax from single-screen theatres, multiplexes, cable operators, auditoriums, cultural halls and ticketed social and cultural events. But GST came into force on July 1, 2017, and the state government granted a temporary exemption from entertainment tax under Section 3 of the Maharashtra Entertainment Duty Act. On May 3, 2023, during the tenure of then chief minister Eknath Shinde, the state cabinet extended the exemption until September 30, 2026.
Because the exemption has dragged on, the gap between the NMC's income and actual collection, already strained by a cash crunch, has kept widening. By the NMC's estimate, had collection continued, entertainment tax would have yielded Rs 148.80 crore in 2026-27.
The figures show how the estimate has grown over the years. The district collector's office collected Rs 20.24 crore in 2015-16 and Rs 24.01 crore in 2016-17. By the NMC's estimate, it could have received Rs 28.84 crore in 2017-18, Rs 41.53 crore in 2019-20 and Rs 59.80 crore in 2021-22.
In 2024-25 the figure crossed Rs 100 crore, reaching Rs 103.34 crore. In 2025-26 it rose to Rs 124 crore. For the current financial year, the NMC has put the likely collection at Rs 148.80 crore. The sum of the estimated losses across all these years is the basis of the NMC's Rs 748.62 crore claim.
"Entertainment tax was a major source of revenue for the NMC. If this grant is received, it will give the NMC financial relief and help ease the shortage of funds for development works," said Milind Meshram, in-charge additional municipal commissioner.
The civic administration is expected to formally place before the state government a new proposal seeking financial compensation for the revenue lost during the exemption period.
Entertainment tax by year, including estimated revenue (Rs crore): 2015-16, 20.24; 2016-17, 24.01; 2017-18, 28.84; 2018-19, 34.61; 2019-20, 41.53; 2020-21, 49.83; 2021-22, 59.80; 2022-23, 71.76; 2023-24, 86.11; 2024-25, 103.34; 2025-26, 124.00; 2026-27, 148.80.
