Currently, the government collects nearly Rs 110 crore in entertainment taxannually.

The leading players in the leisure industry namely Zee group, Warner Bros,Kodak India, Beautiful Cineplexes, Megaplex, Mangala Theater (Pune), HanjarTheatre (Jogeshwari,Mumbai), Ram Shyam (Jogeshwari, Mumbai), G-2000 (Pune),Meghdoot (Navi Mumbai) and Dean Holiday have shown keen interest in thedevelopment of multiplexes in and outside Mumbai. The investment will varyfrom Rs 15 crore to Rs 30 crore per multiplex.

In the category of 100 per cent foreign direct investment, the governmenthas identified 12 locations for multiplexes in Greater Mumbai and eightothers across the state.

Under the 50:50 joint venture scheme for Indian and foreign companies, thegovernment has identified eight multiplex sites in Greater Mumbai and fivein the rest of Maharashtra while in the case of 100 per cent Indian-ownedventures, there will be four multiplexes in Greater Mumbai and three inother parts of the state.

Mantralaya sources told eFE that the government would amend the existingMumbai Entertainment Tax, 1923, for giving such exemption to the investors.Though the Sharad Pawar government in 1994 and the previous Shiv Sena-BJPgovernment in March 1999 had formulated similar policies, they stayed onpaper without seeing the light of day.

The government plans to grant a four-year entertainment tax exemption forthe developer of multiplexes in the jurisdiction of Mumbai MetropolitanRegion Development Authority (MMRDA-Mumbai, Thane, Vasai) while it will befive per cent in the non-MMRDA including the coastal Sindhudurg district.In the MMRDA, to be entitled to tax exemption a certificate of completion ofthe project between April 1, 2000 and March 31, 2004 will be required, whilein case of non-MMRDA multiplexes the time frame has been set from April 1,2000 to March 31, 2005.

Although the state revenue department's proposal had come up for discussionduring the cabinet meeting on May 24, it could not be passed as the statedeputy chief minister Chhagan Bhujbal who also holds the tourism portfoliowished to make it more comprehensive.

The tax exemption will be granted only only after developers undertake torun the multiplexes for a minimum period of 10 years. The clause wasinserted to ensure seriousness on the part of developers who might be merelytempted by the tax exemption, the sources said.

The developer will be required to construct atleast four theatres with acapacity of 1,500 seats in the proposes multiplexes. The multiplexes mayinclude arts and exhibition gallery, entertainment and game centres forchildren and families, restaurants, car complex, trading centres, healthcentres and a small hotel with a lodging facility.

The Democratic Front government has laid down a condition under which thedeveloper of multiplex would not be allowed to charge higher ticket ratescompared to existing cinema houses especially in district and mofussilareas. The government also plans to allow the conversion of existing cinemahouses into multiplexes in various parts of the states provided they fulfillthe above conditions.

In addition to this, the government proposes similar entertainment taxexemption for hotels, resorts, health farms, motels, apartment hotel,watersports, arts village, golf course, convention centre, hill station in aserious bid to give a boost to tourism.