The goods and services tax (GST) rates on certain items including movie tickets costing up to Rs 100 have been lowered to 18 percent versus 28 percent proposed earlier. Tickets above Rs 100 will continue to attract 28 percent.
Here's how cinema players are viewing the GST rates on movie tickets:
Nitin Sood, CFO, PVR
"We had made a representation to the government to price and put GST rate equal to 18 percent which is closer to our current effective rate which is paid by the industry. I think it is a welcome move that the government is trying to classify mass entertainment and premium separately but I believe that the price cap is too low. At Rs 100 bulk of India will be out of a good movie watching experience. In case of other entertainment events like theatres, live events, circus etc, the government has effectively put a price cap of Rs 250, in fact everything priced below that has been exempt. I do not think our industry is looking for any kind of an exemption but it will be good if the tax rate would have been closer to 18 percent for all tickets."
Deepak Asher, President, INOX Leisure
"If GST remains at 28 percent for a bulk of our tickets, obviously there is either going to be an impact on margins or will need to push up ticket prices which could potentially impact footfalls. So we need to understand as to how the dynamics between pricing, cost structure and footfall will play out subsequent to the roll out of the GST."
Rahul Puri, MD, Mukta Arts
"Between 20 percent and 25 percent of our shows would be Rs 100 and less in terms of our capacity and that would be roughly between 12 percent and 15 percent of our revenue."
"We are looking for improved performance this year but what is concerning is the impact of GST and all the cinema players will be seeing exactly how that plays out."Watch accompanying videos for more details.