Goods and service tax (GST) getting implemented from July 1, watching movies might turn out to be a costlier in several parts of the country.
let us first understand what is GST?
Goods & Services Tax is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition.
It has a system of Input Tax Credit which will allow sellers to claim the tax already paid, so that the final liability on the end consumer is decreased.
Impact of GST on the entertainment industry –
Union Finance Minister Arun Jaitley announced GST rates, wherein tickets costing `100 and below were brought under the 18% slab, while those costing higher than `100 will continue to fall in the 28% slab.GST will include present entertainment tax and service tax to replace it with a single 28% tax.
Current rate of tax on cinema exhibition across india around 19.5% , so the new rates can prove to be detremential especially when they are clubbed with local body taxes.
Regional films – fight for survival
2,100 films made in India annually , only 400 films are in hindi . the rest are all regional films will be in the mess because 18% and 28% are still high for them . regional producers employ so many people despite their losses.
India approximately has 9000 screens of which roughly 4000 are in the southern states of tamil nadu , kerala , Andhra Pradesh ,Karnataka .
Cine- goers in states like Maharashtra and Delhi could gain from the 28% GST rate since the existing rates in the states is around 38 % to 40%. But on the other hand it will have unfavourable impact on states like Gujarat , Punjab , Andhra Pradesh , Telangana where the rates were much lower before.
At last we can say that the impact of GST on the entertainment industry can be both positive and negative . Hindi film industry is likely to be the biggest beneficiary of the move but regional cinema seems to be as disadvantage.