NEW DELHI: The Supreme Court today stayed an order of the Entertainment Department of Delhi Government that entertainment tax should be paid by local cable operators with effect from 1 April 2013.

The division bench of Justice Ranjan Gogoi and Justice Navin Sinha issued notice to multi-system operators and the Delhi Government to file their replies and listed the matter to come up on 1 September 2017.

It was alleged by some associations of local cable operators – All Local Cable Operators Assciation, All Delhi Local Cable Operator Association, Cable Operators Welfare Association and Walled City Cable Operators Association -- that they had earlier been paying entertainment tax to the MSOs but this had not been deposited with the Delhi Government.

Meanwhile, some MSOs had approached the Delhi High Court challenging a directive of the Government of 17 December 2012 relating to DAS. In its ex-parte order, the Court on 9 March this year said that MSOs who had subscribers directly linked to them would pay the tax while the LCOs would pay for the subscribers linked to them.

Consequently the Delhi Government had issued notices to the LCOs to deposit the tax from 1 April 2013 onwards.

The LCOs thus alleged that this amounted to double taxation as they had already paid the entertainment tax to some of the MSOs who allegedly did not pay to the Government.

Until 1997, the LCOs had been paying the tax but later this was passed on to MSOs to be paid. Later the Aam Aadmi Party government had doubled the tax from Rs 20 to Rs 40 in 2014.