Maharashtra Govt Reinstates Tax Waiver for MJ Concert in 1996; Wizcraft to Get Back Rs 3.36 Crore

by  EVENTFAQS Bureau Industry Watch | January 7, 2021 | News

Wizcraft International Maharashtra Government Michael Jackson

More than 24 years after Michael Jackson performed in a charity concert in Mumbai, the Shiv Sena-led Maharashtra State Cabinet has approved the entertainment tax waiver given to event management company Wizcraft International for the 1996 concert, organised under the now defunct Shiv Udyog Sena (SUS) which was then headed by Maharashtra Navnirman Sena (MNS) chief Raj Thackeray.

With this approval, Wizcraft will get its pending gross ticket sales money of Rs 3.36 crore, which had been deposited with the courtroom’s treasury after the tax exemption was challenged in the Bombay High Court by the Mumbai Grahak Panchayat.

How the case proceeded

The proceedings in the matter were delayed, as the State contended that ‘important case papers had gone missing’ in the 2012 Mantralaya fire. Eventually, in 2018, when the BJP-Shiv Sena Government was still in power, the State Revenue Department carried out hearings in this regard.

Later, under the Congress, the Department reiterated that the earlier Shiv Sena Government’s exemption order of 1996 was in accordance with laws and granted under special powers. The Mumbai Grahak Panchayat then argued that pop music didn’t qualify for a waiver under provisions of the Entertainment Duty Act (1923). Additionally, it contended that the SUS was not registered as a charity organisation with the Charity Commissioner. However, siding with Wizcraft’s viewpoint, the Department has said that ‘pop music was a form of beat music’ and that ‘beat music qualified for a waiver’ under then prevalent norms. Ruling that the exemption was passed under special powers, it had said that ‘there is no need to delve into whether the charity purpose for the show was met’.

The proposal for revalidation was initiated by the previous BJP-Shiv Sena regime, which had an identical exemption for a British rock band Coldplay show in 2016.

The verdict of Jan 6

Commenting on the verdict, Cabinet Minister Subhash Desai in his statement mentioned that the “Sena Government’s Cabinet had given the tax waiver in 1996 itself, and the decision was challenged in High Court, and the court had set aside the order, sending it back to the Government. Later, a detailed review was undertaken by the Cabinet at that time and today the State Cabinet has approved the proposal to waive entertainment tax on the concert. With this, Rs 3.3 crore that was deposited by the organisers will be returned to them.”

Case Rewind:

- Shiv Udyog Sena led by Raj Thackeray had organised the Michael Jackson concert in Mumbai in 1996 in collaboration with Wizcraft.

- Then Shiv Sena-BJP Government had granted a waiver of Rs 3.36 crore in entertainment duty as proceeds for charitable purpose.

- However, the waiver amount was deposited in the court’s treasury after the tax exemption was challenged in the HC by the Mumbai Grahak Panchayat.

- In 2011, the Govt was asked to reconsider the plea by Wizcraft.

- On January 6, 2021, Govt announced its verdict to approve tax waiver for the concert, and return Wizcraft its gross ticket sales money of Rs 3.36 crore.