The GST Council had proposed taxing movie tickets at a flat rate of 28 per cent.
New Delhi: The GST rate of 18 per cent tax on cinema tickets below Rs 100 under is too little a relief and this is not enough to spur growth, according to multiplex operators.
According to the Multiplex Association of India (MAI), the sub-Rs 100 movie tickets account for only around 10 per cent of total ticket sales volumes, contributing only 6 per cent by value in revenue. Earlier, the GST Council had proposed taxing movie tickets at a flat rate of 28 per cent.
However, at its meeting yesterday, it had decided that all movie tickets costing Rs 100 and below will attract 18 per cent tax while those above Rs 100 would attract 28 per cent GST.
"This is too little. The prospects of the industry would be adversely impacted and it will hamper growth," Multiplex Association of India President Deepak Asher told PTI.
According to him, under the current existing system, rate of tax on cinema exhibition in India as a whole is around 19.5 per cent.
"As such, we have been witnessing several cinema halls shutting down even in states where the tax rates are lower than 18 per cent," said Asher, who is also Director Inox Leisure and Group Head.
Expressing similar views, PVR CFO Nitin Sood said: "To put a lower cap of 18 per cent for Rs 100 and below is actually quite a disappointment. There are hardly any theatre with Rs 100 and below pricing."
Across the country in most states, the pricing would be a minimum of Rs 150-200, he added. Citing example of PVR, which is present in 50 cities, he said: "Less than 10 per cent of the total tickets which we sell fall within Rs 100 bracket."
Mukta Arts, which runs Mukta A2 Cinemas, demanded that the 18 per cent GST slab should be applicable for all cinema tickets.
"We do not understand why GST rates on cinema tickets should be bifurcated this way," Mukta Arts Managing Director Rahul Puri said.
Asher also said regional cinemas would also be hit hard by the GST rate structure.
"All regional films are exempted from entertainment tax, but in GST, there is no such exemption. It would also kill the regional film industry and small multiplexes dependent on them," he added.
The multiplex operators also argued that even under GST, they have to pay additional entertainment tax imposed by local municipal bodies over and above the GST rates.
MAI claims to represent around 80 per cent of multiplex industry in India. Its members operate over 500 multiplexes with more than 1,800 screens across the country.