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EDMs Cause Loss To Public Exchequer

Months after letting yet another organizer of EDM (electronic, dance and music) festival scoot without paying taxes the state government has begun making efforts to recover the dues from Sudarshan Entertainment Private Ltd, the company that organised the ‘Timeout 72’ EDM festival at Vagator last year. The amount due from Sudarshan Entertainment Private Ltd is yet to be quantified in absence of records. It is strange that despite having announced a series of measures to protect the interests of the state and ensure that the organizers pay the dues the state machinery failed to take steps to prevent default. As for Sudarshan Entertainment Private Ltd, the government did not even have their proper address. They failed to deliver notices for recovery. It is only now that the government has found the correct address of the organizers in Ahmedabad, Gujarat and served a notice for recovery to them. Percept, the organiser of Sunburn, an EDM festival held from 2012 to 2016, owes the state government Rs 3 crore. With Percept having property in Mumbai, the government is seeking the help of local authorities in recovery.

Despite having been ‘denied’ legitimate dues by the earlier EDM organizers, the state officials did not think it fit to ensure that the organizers of Timeout 72 did not follow their evasive path to deprive the government of its taxes. It is rather surprising that the commercial taxes department even failed to verify the address and antecedents of promoters of Sudarshan Entertainment Private Ltd and sent the notice on a wrong address, which was returned without being served. The government has obviously failed to learn from its past mistakes. There were allegations that the organizers of Timeout 72 had political connections and the chief promoter belonged to one of the organizations of the BJP in Gujarat. Letting them go without paying taxes might even look like leniency to organizers owing to their high political clout. Tourism Minister Manohar Azgaonkar had announced on the floor of the Assembly that permission would be issued to the organizers only on compliance of all conditions issued in the provisional no objection certificate. It is clearly evident that the officials failed to ensure that all the provisions were complied with before granting permission for the last year’s EDM event.

Despite the state-level permission committee having directed the organisers of Timeout 72 to pay all fees, including a licence fee of Rs 1 crore, before the event, it is now evident that officials allowed them to hold event without complying with all the requirements. The organizers apparently also failed to provide bank guarantee within the stipulated time, which otherwise would have helped the state to recover part of the dues. Was the whole drama leading to granting permission at the last-minute stage managed to facilitate the organizers to evade payments? So sure were the organizers of the event about getting all the permissions from the state authorities that they put out their advertisement much before applying for permissions. It is now clearly evident that the organizers relied on their contacts to get the approvals from the state government without hassles rather than following the rules.

Though they did not comply with the requirements, the organisers requested the state-level permission committee to waive the tax on the ‘passes’ issued by them. To whom were the passes issued by the organizers? Were they given to politicians or officials? Had the commercial taxes department been informed of the number of passes issued? Last year was not the first time that permissions to hold EDMs was granted at the last minute. Organizers use the lacunae that exist in the rules related to organizing of EDMs to their profit. The government has failed to plug them. The government has also failed to honour the directions of the High Court as far as recovery of dues from the organisers of EDMs in the past few years is concerned.

The public was given to understand that the commercial taxes department has a foolproof system of monitoring and recording ticket sales so as to be able to calculate the total earnings of the organizers. Why does not the department know then how many tickets were sold by Timeout 72 organisers and what were their earnings? Why do they have to ask the organizers how much they earned? Will the organizers be truthful in giving the earning figures? It is one more case of the sharks getting away and the smaller fish getting caught in the net. The state government should be ashamed of its laxity, which amounts to indirect or direct complicity in causing loss to the public exchequer.

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