Cinema had remained part of the highest tax slab, wherein film tickets whose price exceeded Rs 100 were subject to 28% GST, while those below the rate worked with 18%, resulting in high ticket prices for movie-goers. But, in the 31st GST Council meet on last Saturday, 22nd December, the Finance Minister Arun Jaitley announced a tax reduction on movie tickets of less than Rs 100 from 18% to 12%, while tickets above than Rs 100 to 18% from the earlier 28%.  This decision has come after some of the prominent names in the Industry had a sit down with the Honourable Prime Minister of India earlier this month to discuss such grievances among other things affecting the Industry.

Previously, states such as Uttar Pradesh and Delhi charged 66.6% and 40% entertainment tax on the net earnings of a movie so that the 28% rate was beneficial to exhibitors there, provided further local taxes were not announced. But the picture in many states such as Punjab in the north and Tamil Nadu, Andhra Pradesh and Kerala in the south was much different. The former had charged zero entertainment tax until the imposition of GST.

In several south Indian states, not only were ticket prices always been capped, but regional cinema, including Kannada and Malayalam films, worked with very low tax rates — in the range of 10 to 15%. In fact, in October this year, about 350 cinemas in Madhya Pradesh closed down to protest the imposition of 15% local tax in addition to the 28% GST.

But certainly, this is going to come as a welcome change for everyone in the Industry and is going to be highly beneficial to all. It’s a huge relief that this decision has been taken and this is certainly going to get better for the fans as well as the ticket prices will be slashed down massively. This will also help the industry in moving forward and overall help create a better cinema experience for everyone.

By – Amul Vikas Mohan Trade Magazine