You are here: Home » Economy & Policy » News » GST
Business Standard

Exhibitors rally against 28% GST on cinema halls

They say film industry survival at stake with lack of screens, poor footfalls, threat from Hollywood

Urvi Malvania  |  Mumbai 

Exhibitors rally against 28% GST on cinema halls

The announcement of the Goods and Services Tax (GST) rates came as a disappointment to the film industry, specifically to the exhibitiors, as were put in the 28 per cent bracket. 

Interestingly, other categories in this bracket include luxury goods, casinos, races and 5-star hotels. The (MAI) has appealed to the government to reduce this levy in the interest of the survival of the  

The letter, signed by president of MAI Deepak Asher, points out the various challenges that the industry is facing, including lack of screens, decreasing footfalls and competition by It adds that the total tax levied on cinema house may actually be more if the local bodies decide to levy an additional tax. 

“Many states are now empowering local bodies (municipal corporations, municipalities, panchayats, local councils, district councils, etc.) to levy an additional entertainment tax. While entertainment tax levied by the state government is subsumed in GST, entertainment tax levied by such local bodies would be outside of the regulatory framework. In other words, according to the current tax regime, the entertainment tax levied by such local bodies would not be creditable under the regime and would end up being an additional tax. In substance, could well end up paying, not just a prohibitive 28 per cent GST, but possibly a 10 - 25 per cent local body entertainment tax as well,” Asher argues in his letter.

The exhibition industry, which includes single screens and multiplexes, was rallying for the implementation of in the hope that the taxation will decrease. Until now, the exhibitors paid blended taxes depending on the tax regime of the states. So the tax component varied from state to state. 

“We were hoping to be placed in the 12 to 18 per cent slab. This would have been a balanced approach to the taxation issue for the exhibition industry,” says Ajay Bijli, chairman and MD, Ltd, the largest multiplex chain in the country with more than 500 screens. 

He adds that while the burden of taxation will be felt equally by multiplexes and single screens, exhibitors in Tamil Nadu, Karnataka and Madhya Pradesh will have a particularly tough time since the government (state) has levied a cap on ticket prices in the state. In this case, since the ticket price cannot be raised, the operators stand to take a major hit in the bottom-line, especially because all three states had entertainment tax levy less than 28 per cent.

RECOMMENDED FOR YOU