THIRUVANANTHAPURAM: A devastating Local Fund Audit report has revealed a massive loss of lakhs of rupees to the Thiruvananthapuram Corporation, stemming from the alleged failure of ‘Funtura,’ the popular gaming zone at Lulu Mall, to pay entertainment tax. The serious irregularity was flagged during the audit inspection for the 2023-24 financial year.
The audit notes that the Corporation, which is governed by a council with Arya Rajendran as Mayor, was initially reluctant to collect the tax from the establishment. It was only after the audit report exposed the enormous financial loss that the civic body finally issued a notice demanding the due amount.
In response, the Lulu Mall-based establishment sought legal recourse by approaching the High Court. The audit report strongly recommends that the Corporation take all necessary steps to safeguard its interests in the ongoing High Court case (WP(C) 33260/2024).
The audit’s core finding is that Corporation officials failed to bring ‘Funtura’—which operates amusement facilities like roller coasters, bumper cars, and video games—under the purview of the relevant 1961 law. This statute mandates that institutions organizing entertainment events must pay a fixed percentage of the entry fee as entertainment tax on a monthly basis.
The audit department had sought an explanation regarding this lapse, but the Corporation did not respond. The Corporation issued the tax demand notice only after the audit’s persistent inquiry. This action prompted Lulu International Shopping Malls Private Limited to file a case in the High Court.
Based on a government order dated January 31, 2024, the establishment is liable to pay 10% of the entry fee as entertainment tax. The audit report urges that this amount be calculated and recovered immediately. Furthermore, it recommends that a decision be taken at the government level regarding the collection of tax for the period between April 2023 and January 2024. The report’s final directive is a strong call for the Corporation to take all appropriate steps to protect its financial interests in the pending High Court litigation.
