Entertainment Tax Act Does Not Contain Mechanism To Assess Or Collect Tax On Sponsorships: Delhi High Court

The Delhi High Court ruled that the Entertainment Tax Act lacks a mechanism for assessing and collecting tax on sponsorships. Justice Rajiv Shakdher held that the inclusion of sponsorship amounts as 'payment for admission' under Section 2(m) via a retrospective amendment in 2012 was arbitrary and violated the Constitution. The court clarified that sponsorship payments are made for advertising rights, not for admission to entertainment events, thus should not be taxed under the Act.