Kathmandu, February 26:

The Supreme Court today scrapped a government decision to impose an additional tax on entertainment businesses.

The apex court scrapped Section 3 of the Timely Tax Collection Act, 1955, that imposed additional tax on entertainment businesses. The Ministry of Finance had issued a notice to film halls to pay 20 per cent tax on the income from ticket sales or the amount based on seat capacity of the halls, whichever is bigger.

Stating that the provision was against the Interim Constitution, a three-member bench of Justices Ram Prasad Shrestha, Girish Chandra Lal and Prakash Wosti issued the verdict.

Eight cinema hall owners had moved the Supreme Court, challenging the government decision, on November 16 last year.

The bench quashed the government’s decision and told the authorities — the Prime Minister’s Office, Ministry of Finance, Ministry of Law, Justice and Constituent Assembly Affairs and Inland Revenue Department — not to implement the decision.

Triratna Manandhar, the owner of Aasta Narayan Pictures; Mohan Sarraf of Bishwo Jyoti; Nakim Uddin of Vision Quest; Rajendra Shakya of Guna Cinema; Pradip Kumar Udaya of Butwal Chalchitra Mandir; Hari Prasad Dwa of Kalika Chalchitra Mandir; Kishor Sah Teli of Girija Chalchitra had jointly filed a petition in the Supreme Court, seeking its intervention to scrap the government decision, which they said was unjust and discriminatory.