Narendra Modi government has made serious attempt, taxing of movies at the rate of 28 percent under Goods and Service Tax (GST)
The Multiplex Association of India (TMAI) said that the rate of tax levied on movie tickets under GST is very discouraging. “We had made a representation to the Government, Including the GST Council, that the cinema industry should be taxed at a benevolent rate of around 5%. There are several reasons to support this argument. India has one of the largest film industries in the world.
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It is perhaps the only local film industry to have withstood the threats of Hollywood. It supports the Prime Minister of India’s “Make in India” and “Digital India” campaigns. Despite this, screen penetration in India is amongst the lowest in the world – with less than 10000 screens in India, which has a population of 125 crores, as compared to China’s more than 35000 screens, with a population of 135 crores. Though cinema is the primary, if not only, form of entertainment for the masses, film viewership remains amongst the lowest in the world, with less than 4% of India’s population having watched the largest mainstream Hindi movie of 2016 – Dangal.
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With this backdrop, we had expected the GST rate for cinema to be either 5% or at worst 8%. Under the circumstances, we are completely shocked, that the GST Council has decided to tax cinemas at the prohibitive rate of 28%,” said Multiplex Association of India expressed their displeasure.”28% GST is the same rate recommended for racing, gambling and casinos. We are stunned to note that the GST Council considered it appropriate to tax a clean and wholesome form of family entertainment like cinema, as a vice or a sin on par with gambling,” said Deepak Asher, President of Multiplex Association of India.