Nagpur: With its finances under mounting pressure, the Nagpur Municipal Corporation (NMC) has revived its demand for a Rs 748.62 crore grant from the Maharashtra Government to make up for revenue it claims to have lost following the suspension of entertainment tax collection after the introduction of GST in 2017.
The civic administration has begun preparing a fresh proposal for submission to the State Government after the temporary exemption from entertainment tax expired on September 30, 2026. The move comes nearly three years after the then Municipal Commissioner Abhijeet Chaudhari had written to the State seeking compensation for the revenue loss, but the demand failed to receive any concrete assurance.
Entertainment tax was earlier collected by a special department functioning under the District Collector. In the run-up to the implementation of GST, the State Government amended the Maharashtra Entertainment Duty Act on May 29, 2017, transferring the power to levy and collect the tax to local bodies.
The NMC subsequently became responsible for collecting entertainment tax from single-screen theatres, multiplexes, cable operators, auditoriums, cultural halls and ticketed social and cultural programmes.
However, with GST coming into effect on July 1, 2017, the State Government granted a temporary exemption from entertainment tax under Section 3 of the Maharashtra Entertainment Duty Act. The exemption was subsequently extended by the State Cabinet on May 3, 2023, during the tenure of then Chief Minister Eknath Shinde, until September 30, 2026.
The prolonged suspension has translated into a steadily widening revenue gap for the cash-strapped civic body. According to NMC estimates, the potential annual revenue from entertainment tax, had the collection continued, would have reached Rs 148.80 crore in 2026-27.
The figures indicate how sharply the projected revenue has grown over the years. The District Collectorate had collected Rs 20.24 crore in 2015-16 and Rs 24.01 crore in 2016-17. NMC’s projections put the potential revenue at Rs 28.84 crore in 2017-18, rising to Rs 41.53 crore in 2019-20 and Rs 59.80 crore in 2021-22.
The projected figure crossed the Rs 100-crore mark in 2024-25, reaching Rs 103.34 crore, and climbed further to Rs 124 crore in 2025-26. For the current financial year, NMC has estimated the potential collection at Rs 148.80 crore.
The cumulative projected loss over the period has now formed the basis for the civic body’s Rs 748.62 crore compensation demand from the State Government.
“Entertainment tax was a major source of revenue for NMC. The grant, if provided, would bring financial relief for the civic body and help overcome fund constraints for development works,” said officiating Additional Municipal Commissioner Milind Meshram.
The civic administration is now expected to formally place its fresh proposal before the State Government, seeking financial compensation for the revenue foregone during the period of exemption.
Entertainment tax: revenue trajectory
Financial year Revenue / projected revenue
2015-16 Rs 20.24 crore
2016-17 Rs 24.01 crore
2017-18 Rs 28.84 crore
2018-19 Rs 34.61 crore
2019-20 Rs 41.53 crore
2020-21 Rs 49.83 crore
2021-22 Rs 59.80 crore
2022-23 Rs 71.76 crore
2023-24 Rs 86.11 crore
2024-25 Rs 103.34 crore
2025-26 Rs 124.00 crore
2026-27 Rs 148.80 crore
