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Multiplex Association of India urged GST rate cuts on movie tickets and food, proposing tickets up to Rs 300 be taxed at 5 percent to boost affordability for cinema-goers
MAI proposes 5% GST for tickets up to Rs 300.
After Prime Minister Narendra Modi announced changes in the Goods and Services Tax (GST) framework, several industries across the country have begun presenting their demands for tax relief. Joining the list, multiplex operators have appealed to the government to rationalise GST rates on movie tickets, arguing that the current structure is disproportionately high and hampers audience turnout.
The Multiplex Association of India (MAI), which represents more than 9,000 cinema screens across the country, has urged the government to revise the current GST slabs and make cinema-going more affordable for the public. MAI said such a move will not only make cinema more affordable for the masses but also provide much-needed relief to an industry that has struggled financially since the Covid-19 pandemic. The body suggested that tickets priced up to Rs 300 should be brought under the lowest 5 percent GST bracket, while tickets above Rs 300 can continue to attract 18 percent GST.
At present, movie tickets priced above Rs 100 are taxed at 18 per cent, while those below Rs 100 attract 12 per cent GST. MAI has proposed that this threshold be revised significantly. “We are recommending that the Rs 100 slab be raised to Rs 300, so ticket prices till Rs 300 should attract 5 per cent GST, and anything higher than Rs 300 should attract 18 per cent GST,” MAI President Kamal Gianchandani told PTI.
Gianchandani said the Rs 100 ceiling has become unrealistic in today’s context and pointed out that despite repeated representations to the Finance Ministry and the Ministry of Information and Broadcasting over the past seven and a half years, there has been no change. “Rs 300 slab will make cinema tickets more affordable,” he said, adding that it will also infuse confidence in the exhibition sector, the incumbent players need that boost, in order to accelerate the growth rate.
Citing current market trends, he noted that the average ticket price in India hovers around Rs 170-175. “… if the government accepts our recommendation of keeping ticket prices below Rs 300 at a 5 per cent level, you should expect a reduction of at least… 20-25 odd rupees in the average ticket price,” he reportedly said.
The industry body, which claims to represent over 9,000 screens nationwide, including 4,000 multiplexes and 5,000 single screens, said the cinema sector is both a “fit case” and an “ideal mandate” for GST rationalisation.
MAI also drew attention to another sticking point, the taxation of food and beverages sold in cinema halls. These sales are currently treated as “restaurant service without input tax credit (ITC)” which, according to the association, results in inefficiency and higher costs. “All inputs that we purchase from our partners and vendors, we are not able to set off the GST that we pay on it, towards our output GST, so currently there is inefficiency, complexity existing in the GST structure as far as the F&B part of our business is concerned,” Gianchandani explained.
He added that if ITC is allowed, the GST structure will not only be more efficient but also simpler and easier to comply with. MAI has argued that addressing both ticketing and food-related taxation will be critical in ensuring the long-term revival and growth of the cinema exhibition industry.
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