Question

Rahul bought a ticket for ₹200 plus 5% tax for a movie that was released in 2020. Identify the tax he would be paying.

• A. Indirect tax
• B. Direct tax
• C. Entertainment tax
• D. Goods and services tax

Answer 1

The correct option is D Goods and services tax

The government collected various indirect taxes, excise duty, and entertainment tax. Entertainment tax is charged on any source of entertainment like movies, sports, concerts, etc. It was challenging to manage all the different kinds of indirect taxes. It also increased the price of goods and services. So, the government merged several indirect taxes under one tax, called the Goods and Services Tax or GST on 1 July 2017. After this date, the government collected GST instead of the varied indirect taxes. As Rahul pays the tax in 2020, he would be paying GST and not entertainment tax.