Theme Park Incentive Extensions (Imagicaa World Entertainment vs. State of Maharashtra)

This ruling, delivered in February 2026, addresses the transition of legacy tax incentives into the GST regime and the subsequent impact of the COVID-19 pandemic on large-scale tourism infrastructure projects.

The Legal Issue

Can the Government be directed to extend the period of a tax incentive (SGST Refund) for a “Mega Project” that was forced to close during the pandemic, especially when the original incentive was based on a pre-GST Entertainment Tax exemption?

Facts of the Case

The Project: The petitioner operates major theme and water parks (Imagicaa Theme Park and Aquamagica) in Maharashtra. These were recognized as “Mega Projects” under the Tourism Policy of 2006.
The Incentive: They held Entitlement Certificates granting a 10-year exemption from Entertainment Tax (aggregating to ₹825 crore).
GST Transition: When GST was introduced, Entertainment Tax was subsumed. To protect the incentive, a High-Level Committee recommended—and the Government accepted—a mechanism for SGST Refunds.
Pandemic Disruption: The parks were shut from March 2020 to March 2022 due to COVID-19 lockdowns. The Government issued a Resolution extending the incentive period by two years for that specific timeframe.
The Representation: On 11 January 2024, the petitioner sought further extensions and additional reliefs (such as refunds on a gross basis and interest on delayed payments), but the state authorities left the request undecided.

The Decision

The High Court ruled in favour of the assessee (procedurally), issuing a Mandamus to the State:

Dialogue over Adjudication: The Court observed that extending such massive fiscal incentives is a policy decision. It requires a coordinated dialogue between the Ministry of Tourism, the Ministry of Finance, and other relevant departments.
Mandatory Hearing: The Respondents were directed to consider and decide the petitioner’s representation expeditiously, preferably within two months.
Due Process: The Court mandated that the petitioner be granted a formal hearing and be allowed to submit additional supporting documents before a final policy decision is made.
Open Merits: The Court did not rule on whether the extension must be granted but ensured that the petitioner’s right to a reasoned decision was upheld.

Key Takeaways

Policy vs. Law: When seeking extensions of “Mega Project” incentives, the remedy often lies in administrative law (forcing a decision on a representation) rather than a direct tax challenge, as these are governed by State Government Resolutions (GRs).
Pandemic Extension Precedents: This case highlights that the 2-year extension already granted by Maharashtra is a baseline. Taxpayers can argue for “allied reliefs” (like gross-basis refunds) if they can prove the 18% GST rate significantly dilutes the original 15% Entertainment Tax benefit.
Section 11 Power: Under the CGST/MGST Act, the Government has the power to exempt or refund tax in the “public interest.” Arguments for tourism development and job creation (18 lakh jobs targeted by 2034) are central to these policy discussions.

Status of Maharashtra Tourism Policy 2024

The new Maharashtra Tourism Policy 2024 (notified July 18, 2024) now formally includes:

SGST Reimbursement: Up to 100% of net SGST paid.
Pandemic Clauses: Provisions for extending eligible time periods by up to 2 years in the event of disasters or epidemics.

HIGH COURT OF BOMBAY

Imagicaaworld Entertainment Ltd.

Union of India^*

G. S. KULKARNI and Aarti Sathe, JJ.

WRIT PETITION NO. 1571 OF 2025

FEBRUARY 12, 2026

Abhishek Rastogi, Pooja Rastogi, Meenal Songire and Aarya More for the Petitioner. Ram Ochani, Niyati Mankad, Pramod Kathane, Amol Ghurde, Jyoti Chavan, Addl. G.P. and Amar Mishra, AGP for the Respondent.

ORDER

1. This Petition under Article 226 of the Constitution of India is filed praying for the following substantive reliefs:-

“(a) direct Respondent Nos. 3 and 4 to consider additional refund, proportionate CGST from 41 per cent of State’s share of devolution of Central Tax as per 15^th Finance Commission Report, to compensate for the loss of entitlement on account of reduction of rate of incentive from 15% to 9% (Exhibit-L); or

(b) direct Respondent No.4 to consider extension of the Entitlement period under Entitlement Certificate Number MTDC/2013/INCENTIVE/TP-2006/EC-44 dated 15.06.2013 (EC-1) and Entitlement Certificate Number MTDC/2014/INCENTIVE/TP-2006/EC-54 dated 25.05.2015 (‘EC-2’) to enable the Petitioner to recover the investment made by them in light of the reduced tax rate from 15% prior to 1 July 2017 to 9% after 25 January 2018 [Exhibit-A and Exhibit-B]; or

(c) direct Respondent Nos. 3 and 4 to consider continuation of SGST rebate/refund to the Petitioner in future Tourism Policy that may be notified post expiry of the 2016 Tourism Policy, so that the Petitioner can recover balance incentives committed under EC-1 and EC-2;or

(d) direct Respondent Nos. 1 and 2 to consider granting rebate/refund of portion of CGST to the Petitioner out of the 9% CGST collected and paid by the Petitioner on sale of each ticket.”

2. Mr. Rastogi, learned Counsel for the Petitioner has confined his submissions to prayer clause (b) of the Petition. It is the Petitioner’s contention that the time limit to fully realize tax exemptions to the tune of Rs. 825 crores granted to the Petitioner in terms of the Entitlement Certificates issued by Respondent No.5 prior to introduction of the Central Goods and Services Tax Act, 2017 (CGST Act) has expired in respect of its theme park (Imagicaa) on 14^th June 2025 and the exemption of water park (Aquamagica) expires on 31 ^st May 2027 and hence the same be extended. The Petitioner has made representation for the same and the same has not been decided yet.

3. Briefly the facts are as under:-

The Petitioner is a Public Limited company engaged in the business of operating Theme Park and Water Park in Khalapur, Khopoli, Raigad under the Entitlement Certificate number MTDC/2013/INCENTIVE/TP-2006/EC-44 dated 15^th June 2013 (for Theme Park by the name “Imagicaa”) and Entitlement Certificate number MTDC/2014/INCENTIVE/TP-2006/EC-54 dated 25^th May 2015 (for the Water Park by the name “Aquamagica”) issued by the Respondent No.5 in pursuance of the Tourism Policy 2006 (TP-2006) of the State of Maharashtra. The Petitioner was earlier know as Adlabs Entertainment Limited and with effect from 7^th April 2020, the name of the Petitioner changed to “Imagicaaworld Entertainment Limited”.

ii.

On 16^th December 2006, to promote tourism in the State of Maharashtra, Respondent No.4 issued a Government Resolution (GR), which exempted Entertainment Tax (ET) for businesses registered under the said TP-2006.

iii.

The project proposed by the Petitioner constitutes a Themepark “Imagicaa” and Water Park “Aquamagica” was recognized as a “Mega Project” by Respondent No.4.

iv.

On 15^th June 2013, Respondent No.5 issued Entitlement Certificate-1 (EC-1) for Theme Park (Imagicaa) with ET exemption of INR 724.39 crores for 10 years to recover the investment cost. On 31^st December 2014, the Petitioner completed drawdown of loans from multiple banks and financial institutions to fund the aforesaid projects.

On 25^th May 2015, Respondent No.5 issued Entitlement Certificate-2 (EC-2) for Water Park (Aquamagica) with ET exemption of INR 101.06 crores for a period of 10 years.

vi.

The Petitioners were entitled to ET exemption till 2026, as an Existing Unit under the new policy issued vide GR No. TDS-2015/11/CP1021/Tourism (Tourism Policy 2016) by bringing additional investments and jobs.

vii.

On 1^st July 2017, the Goods and Services Tax (GST) was implemented and ET was subsumed with no clarity in respect of the balance quantum of ET exemption which was given to the Petitioner by way of the aforesaid GRs. The rate of tax was increased from 15% (ET) to 18% (GST). In further circumstances on 16^th October 2017, the Punjab Government issued State Policy continuing ET benefits for industries through SGST reimbursement mechanism.

viii.

On 15^th October 2018, the Petitioner filed Adlabs Entertainment Ltd. v. UOI GSTL 351 (Bombay)/Writ Petition No. 3027 of 2018 before this Court seeking continuity of benefits under GST regime. This Court by order dated 21^st December 2018, issued an interim order directing the Respondents to constitute a High Level Committee to consider the aforesaid plea of the Petitioner.

ix.

On 6^th March 2019, the High Level Committee recommended the State to refund the amount of SGST paid by the Petitioner in terms of the Entitlement Certificates held by the Petitioner under the Tourism Policy 2006.

On 30^th July 2019, in Writ Petition No. 3027 of 2018, this Court by an order of even date, directed the Respondents to take a decision within 12 weeks on the recommendations of the High Power Committee and decide whether to extend the benefit as suggested by the Committee.

xi.

On 4^th March 2020, Respondent No.4 issued GR No. TDC/2017/9/No.104/Tourism of even date accepting the recommendations of the High Power Committee and issued refund of amount of SGST paid by Petitioner. In the year 2020, nation-wide lockdown was imposed due to the Covid-19 pandemic and the Petitioner’s themeparks i.e. Imagicaa and Aquamagica, remained closed during that time. On account of the continued lockdown because of the Covid-19 pandemic, the Petitioner filed representations from time to time during the year 2021 to 2022 before Respondent No.4 and also the Chief Minister of the State of Maharashtra requesting them for an extension of the incentive period as provided under the earlier GRs and also for a refund of 21% of CGST paid by the Petitioner i.e. proportionate to the amount that has been devolved to the State of Maharashtra from the Central Government.

xii.

The Petitioner also filed SGST refund applications on 27^th June 2023. On 31^st October 2023, Respondent No.4 issued GR No. TDS 2022/08/pC 457/Tourism and extended incentive period starting from 1^st March 2020 to 31^st March 2022 by two years owing to the Covid-19 pandemic, however, the issue of entitlement benefits on account of lower SGST rate of 9% as opposed to the ET rate of 15% was not decided/addressed by Respondent No.4.

xiii.

On 11^th January 2024, the Petitioner made a comprehensive representation to the Principal Secretary, Department of Tourism and Cultural Affairs setting out their grievances and further requesting for extension of the incentive period for the declared eligible units and particularly in respect of the Theme parks of the Petitioner i.e. Imagicaa and Aquamagica. In the aforesaid representation, the Petitioner also requested for the SGST refund on gross basis to the Mega projects in line with Industries Policy, GST refund from the portion of CGST devolution to the State Government, charging electricity on Industrial rates to eligible Tourism projects and further interest payment on the delayed receipt of SGST refunds, considering that the earlier benefit was upfront.

4. In the aforesaid backdrop, we have heard learned Counsels for the parties.

5. The learned Counsel for the Petitioner submits that the present Petition primarily seeks extension of the benefits earlier granted to the Petitioner in the year 2013 and 2015, which were subsequently extended during the COVID-19 pandemic. It is submitted by the Petitioner that the two theme parks, namely Imagicaa and Aquamagica, are tourism-oriented establishments that significantly contribute to the promotion and growth of the tourism industry. Grant of the extension of incentive in question would further provide a substantial boost to tourism. Accordingly, it was submitted that the Respondents and the State Government ought to consider the Petitioner’s representation dated 11^th January 2024 and take an expeditious decision thereon.

6. The learned AGP submitted that the Government will consider the request as made by the Petitioner and decide as to whether the Petitioner is entitled for the extension of incentives.

7. In view of the aforesaid submissions made by the learned Counsel for the Petitioner and the Respondents, we are of the opinion that in the peculiar circumstances and considering the nature of the project as involved a policy decision would be required to be taken which involves dialogue between Ministries, specifically the Ministry of Tourism/Department of Tourism and Cultural Affairs and the Ministry of Finance. Further both the said Ministries and other concerned Ministries after collaboration need to take an appropriate decision, in respect of the Petitioner’s case as set on in the representation. We thus leave it to the concerned Ministries to take an appropriate decision, after giving an opportunity to the Petitioner to be heard and be represented before the concerned Ministry. The following order shall, meet the ends of justice:-

ORDER

(a)

The Respondents to decide and consider the Petitioner’s representation/application dated 11^th January 2024, as in accordance with law, as expeditiously as possible, preferably within a period of two months from the date this order is made available to the said Respondents by the Petitioner.

(b)

The Petitioner shall be granted an opportunity of being heard prior to the decision on the aforesaid representation being taken. The Petitioner is permitted to file any further documents in respect to the issues as raised in the representation/application dated 11^th January 2024.

(c)

All contentions of the parties are expressly kept open.

(d)

The Petition stands disposed of in the aforesaid terms. No costs.

(e)

We make it clear that we have not expressed any opinion on the merits of the rival contentions.