The Impact of Goods and Services Tax Big blow for the movie industry.

Jackey Motwani
Jackey Motwani
Jun 16, 2017
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The Impact of Goods and Services Tax: Big blow for the movie industry.

The Goods and Services Tax (GST) will be implemented on July 1 of this year which means watching movies might be costlier in several parts of the country. A flat GST of 28% was initially levied on all movie tickets, regardless of their price. However, Finance Minister Arun Jaitley announced on Sunday the revised GST rates, wherein tickets costing 100 and below were brought under the 18% tax level while movie ticket higher than `100 will continue to fall in the 28% level.

Notwithstanding, the movie industry feels that the new tax rates are still too high considering the possible implementation of a local body tax (LBT), which will vary across the country, making movies the only product and service with dual taxation.

The President, Multiplex Association of India, Deepak Asher, says that 18% GST on cinema tickets priced under `100 is not a big relief. The calculation is easy: Tickets priced below `100 form nearly 10% of the total number sold, which is around 6% of the revenue. Also, with the current rate of tax on cinema exhibition across India being around 19.5%, the new rates maybe harmful to the industry, especially when they're added with local body taxes.

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