Frontline national trade and industry body Assocham wants the Centre to have a re-look at Goods and Services Tax rate (GST) on movie tickets, especially the highest slab of 28% levied on tickets priced above Rs 100.
“Tinkerings are required… 28% is a luxury tax,” Anita Rastogi, Partner (Indirect Tax) PwC India said at the launch of the report of an Assocham-PwC joint study on GST’s impact on film industry.
Footfalls in theatres have reduced, she said, pointing out that besides GST, local body entertainment tax is also levied on cinema tickets in some States. The 28% GST rate on tickets above Rs100 should be rationalised, as has been done in the case of amusement parks, the report said. Movie tickets up to Rs 100 attract a GST of 18%.
Tickets to turn dearer:
Seeking to highlight issues faced with GST by many in the film industry, producer Tammareddy Bharadwaja said an increase in the ticket prices is on the cards as under the GST regime, cinema halls had to remit Rs 42 to the government for every Rs 150 ticket sold. He expected the movie theatres to peg the prices at a level where the impact on their revenue is minimal.
As a corollary, the prices of food and beverages sold in the theatres would also increase thereby making a visit to the cinema expensive for the family, said Mr. Bharadwaja, who also spoke to press persons later.
Commissioner of Medchal GST Commissionerate M. Srinivas said tax rate of film tickets is a policy matter. The Sectoral Working Group on Media and Entertainment, constituted by the government in the run-up to GST, suggested a lower rate of tax on the tickets, Mr. Srinivas, who heads the group, said. Describing the GST as a huge success, he said this was evident from the increase in tax base from 70 lakh assessees, prior to the rollout, to over 1.1 crore at present. He also cautioned assessees against not remitting the levy collected to the government within the prescribed timeframe. It was a serious offence, attracting penal provisions, he said. When a film industry representative said 95% producers were not making profits and how the GST had pushed up the cost of film-making, the official urged the industry to submit a memorandum backed by data.
Source : The Hindu/GST India expert.