Service charge on online movie tickets cannot be included in rate of admission: Andhra Pradesh High Court says (for now)

The Andhra Pradesh High Court passed an interim order in favour of the Multiplex Association of India in a plea challenging the government’s decision to include service charges for online bookings in movie theatres to the overall price for admission [Multiplex Association of India v State of Andhra]..Justice DVSS Somayajulu granted the petitioners liberty to revert to the existing system of levying service charge on ticket buyers for online bookings.“..the petitioners are at liberty to revert back to the existing system of providing online booking and also to levy the existing service charge for the provision of the facility to the cinegoer, who wishes to book tickets online.”.Appearing for the petitioners, Senior Advocate P Veera Reddy contended that the inclusion of service charge for online booking to the overall price for admission was contrary to law, since it was against the provisions of the Andhra Pradesh Cinemas Act. It was also their claim that it amounted to executive overreach.The online ticket booking facility was a service given to the audience, said the petitioner. It was clarified that the same was akin to services like parking, and therefore could not be categorised as “rate for admission” into the cinema theatre..However, Advocate General Subrahmanyam Sriram stressed that the regulation of admission fee was wholly within the State’s competence. It was his submission that time and again, the highest courts of the land, including the Andhra Pradesh High Court, had clearly held that the respondents had the authority to regulate the rate of admission..The Court, while acknowledging that the respondents had the authority to fix the rate of admission, noted that the question was whether service charge for online booking was included in the rate of admission.“Whether online service charges being collected by the petitioners would form part and parcel of the admission charges is an issue to be decided after further hearing and considering the cost break ups etc,” recorded the order..However, prima facie, Justice Somayajulu found that service charge for an amenity like online booking cannot be included in the “rate of admission”.“The rate of admission would mean the “actual ticket cost” payable or is actually necessary for the entry into the auditorium,” said the judge.Further, the Court also took a prima facie view that the government, at best, could convey its opinion to the licensing authority, but the ultimate decision must be of the licensing authority. It was clarified that this issue would also be looked at more thoroughly before being decided.“For the present the prima facie opinion is that the Government cannot be the authority by itself to fix the rates and the charges,” the order stated..With this, it was concluded that the petitioners had made out a case for interference at this stage, and an interim order was passed in their favour..The petitioners were represented by Advocates Sahil Narang, Dhritiman Roy and Khamar from Khaitan & Co. .[Read Order]