Archive · 22 Dec 2025
Kerala High Court Rules Centre's Service Tax on Amusement Facilities Unconstitutional
The Kerala High Court recently decided that the Central government cannot collect service tax on entry tickets to amusement parks.
The court said this is unconstitutional because only state governments have the power to tax entertainment and amusement facilities.
A company that runs an amusement park in Kerala challenged the Central government's decision to impose this tax, arguing that it was double taxation and that the state already collects entertainment tax.
The court agreed and said that the Central government cannot tax the same thing that the state is already taxing.
The court also explained that the Constitution gives states the power to tax entertainment and amusement, and the Central government cannot use its residual powers to tax the same activity.
The Kerala High Court ruled that the Central government cannot impose service tax on amusement facilities, declaring it unconstitutional.
The ruling came in response to an appeal by Vengad Resorts & Retreats Limited, which operates an amusement park in Kerala.
The court stated that entertainment and amusement taxes fall under the state's powers, not the Centre's, as per Entry 62 of List II of the Constitution.
The Central government had removed 'admission to entertainment events or access to amusement facilities' from the negative list under the Finance Act, 1994, in 2015, enabling it to levy service tax on amusement parks.
The court set aside an earlier single-judge order and declared that the service tax on access to amusement facilities is unconstitutional, as it amounts to double taxation and encroaches on the state's taxing powers.
- Who
- Kerala High Court, Vengad Resorts & Retreats Limited, Central Government
- What
- Ruling on the constitutionality of service tax on amusement facilities
- When
- Recent ruling, with initial petition in 2015 and single judge bench decision in 2016
- Where
- Kerala High Court, India
- Why
- To determine the constitutional validity of the Central government's imposition of service tax on amusement facilities, which the state argues is within its taxing powers
- Court
- Kerala High Court
- Appellant
- Vengad Resorts & Retreats Limited
- Issue
- Service tax on amusement facilities
- Constitution
- Entry 62 of List II (State List)
- State Law
- Kerala Local Authorities Entertainments Tax Act, 1961