Maharashtra govt offers investment-based exemption to Adlabs Entertainment

The Maharashtra Government has told the Bombay High court that it has extended investment based exemption granted to Imagicaaworld Entertainment, formerly Adlabs Entertainment for two years of the Covid 19 pandemic period.

The company had filed a petition before the HC, seeking an extension of its entitlement certificate that is issued by the state government. The entitlement certificate was supposed to expire June 14 for the theme park, while the entitlement certificate for the water theme park will expire next year.

“The moot point was whether the incentives must continue under the GST regime. By way of an interim order the Court has -granted relief of the SGST portion. The related issues therefore emerge for extending the eligibility period especially in light of COVID lockdown. We are arguing for extension of period to compensate for reduction of State benefits and due to COVID. Vide Affidavit filed on 26 Oct, State has agreed to extend for 2 years for COVID shutdown – which is indisputable, however have not commented on reduction of benefits due to GST rollout,” said Abhishek A Rastogi, founder of Rastogi Chambers, who argued for the petitioners before the High Court.

“The timely and pragmatic decision by the state Government will certainly boost industry confidence and tourism in the state of Maharashtra”, added l Rastogi.

The company, which owns and operates themed entertainment destination Imagicaa, had moved the HC seeking an extension of its entitlement certificate to 20 years. The bench of Justices GS Kulkarni and Rajesh Patil passed the order on June 9. Imagicaaworld argued that while the Tourism Policy of 2016 permits mega tourism projects to receive incentives for a 20-year period, the Tourism Policy of 2006 only allowed for the issuance of entitlement certificates with a 10-year validity.

On June 6, the bench passed an order directing the state government to take an urgent decision on Imagicaaworld’s application dated August 5, 2022, wherein it had requested the state government to extend the entitlement certificate to 20 years. The Assistant Government Pleader (AGP) stated that the state government will take a decision on the application, and the decision will be accordingly informed to the court.

On June 9, the Maharashtra tourism department informed the AGP that the state government needs some time to take a decision on Imagicaaworld’s application. The department has also sought two months’ time from the court to decide on the application. In an application to the state government last year, Imagicaaworld noted that the 10-year incentive period for its theme park and water park will end in 2023 and 2024, respectively. While stating that it has invested over Rs 800 crore in Maharashtra for setting up the Imagicaa project, the company added that the state government must allow it to avail of incentives for another 10 years

The company also said that it has been able to claim only 25% of the eligible amount of financial incentive that it was granted. Furthermore, it stated that the incentive period got wasted due to the COVID-induced lockdown between March 2020 and March 2022.

The company added that it was allowed to operate at 50% capacity for the balance ¼ of the incentive period. Last year, the Maharashtra-based Malpani Group acquired a 66.25% stake in Imagicaaworld Entertainment by way of preferential allotment of equity shares worth Rs 415 crore.