GST rate cut on movie tickets to reduce prices by 7-8%

The Goods and Services Tax (GST) Council on Saturday announced a rate cut on movie tickets. As a result, tickets upto Rs 100, which had a GST of 18 percent has now been brought down to 12 percent, while those above Rs 100 and previously under GST slab of 28 percent, will now be 18 percent.

According to the Multiplex Association of India, the move was long due and will slash ticket prices by 7-8 percent.

“We felt that there was great injustice done to the sector when we were put in these heavy tax brackets, because watching a movie at the theatre isn’t a luxury. With 2.5 billion tickets sold annually, films, in many cases across India, are the only source of entertainment for the masses,” said Deepak Asher, president at the Multiplex Association of India.

To Asher’s understanding, the new tax rates would be applicable from January 1. However, no formal notices have been issued regarding the same. But once the new tax system is implemented, the exhibitors will be in a position to pass on the benefit to the customers.

“The moment the reduced tax rates apply to tickets, we will be able to help consumers with cheaper tickets. This will increase footfall and occupancy and get more people to theatres more often,” Asher added.

According to Asher, exhibitors would be able to pass on the benefit to distributors too. “There would also be more investment in theatre infrastructure with increased footfall, which will incentivize the creative side of the industry to create more content. The revised tax rate is a win-win move for the entire value chain of the industry,” he said.