What is a Black Market?

Learn about Black Market with Rangeela

 

Case breakdown: Movie Rangeela

The scene depicts black marketing of film tickets. Munna (played by Aamir Khan) is selling a Rs. 10 ticket for Rs. 30 (Dus ka Tees). He purchased some tickets in bulk before the movie started at Rs. 10 per ticket.

People who want to watch the movie (Mr. Bond, in this case) are unable to find the ticket at the movie counter (legally). Therefore, they are now reaching out to Munna to purchase the movie ticket from him in black at Rs. 30.

Munna makes a profit of Rs. 20 per ticket (Rs. 30-10).  In this case, Munna is creating a parallel economy (small one, of course) and won’t be paying any tax on these tickets as they are not even being reported as Income (Unaccounted Income).

The scene is portrayed from a time when India had a single screen theaters. Even today one can find black marketing of tickets but it isn’t that prevalent.

What is a Black market?

Black market is also known as shadow market. It is an illegal and a parallel market that has activities that are outside the terrain of government sanctioned channels. This means sale and purchase of such goods and services is prohibited by law. It can have a bad effect on the economy as these activities are not reported and evade taxes.

Now a black market is quite serious and it entails activities such as:

  1. Illegal drug trafficking
  2. Human trafficking
  3. Weapon Smuggling
  4. Copyrighted media
  5. Counterfeit Medicines
  6. Currency
  7. Fraud/Forgery
  8. Embezzlement

This unrecorded or parallel economy that is created by undertaking such activities leads to loss of money. During this process tax gaps are created. Tax gaps are the difference between taxes due and the ones actually collected. Black marketing of film tickets or selling tickets at an inflated price is a punishable offense too. Though the offender is not jailed, they have to pay Rs. 1,000 as fine, as a first time offender. If caught again, the fine keeps increasing. (Reference: Times of India).

Laws and Regulations:

Many acts and laws are in force to tackle unaccounted income and prevention of money laundering.

Money laundering in simple terms means converting black money into white money. This is done by changing the source from which the money is received. Some of the acts for prevention are:

  • Black money and Imposition of Tax Act, 2015
  • Prevention of Money Laundering Act
  • Foreign Exchange Management Act

For tax department, all income that has not been reported becomes black income. In these cases, it is quite possible that there might be no illegality involved. Non disclosure of income for foreign income attracts a penalty of Rs. 10 lakhs.

References:

  • https://indiankanoon.org/docfragment/1166368/?formInput=black marketting of tickets
  • https://timesofindia.indiatimes.com/life-style/spotlight/do-you-still-pay-dus-ka-tees-for-your-movie/articleshow/17414881.cms

Written by: Gitika Chandra

4 Comments

  1. […] Black market is an illegal market. It includes trading of illicit drugs, weapons, medicines, currency etc. It also includes human trafficking. This unrecorded or parallel economy that is created by undertaking such activities leads to loss of money. During this process tax gaps are created. […]

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