Movie tickets will become costlier with BMC's reintroduction of entertainment tax, say industry associations

MUMBAI: The prospect of film tickets becoming costlier in Mumbai looms large on the horizon after the BMC's budgetary decision to impose entertainment tax upon cinema halls after Sept 2026.


This age-old, dreaded tax was not being levied in Maharashtra since the introduction of the "all encompassing GST". GST had been brought in by the Centre to assimilate and absorb most other taxes.



Entertainment tax has a direct impact on the price of cinema tickets, which are already costly and unaffordable for lower, and to an extent, even middle class families.


On Wednesday Nitin Datar, president of COEAI (Cinema Owners and Exhibitors Association of India) said, "Since the GST levy was implemented, the Centre had allowed individual states to collect entertainment tax. But Maharashtra and some northern states have not implemented it."


Datar said, "Many states in the South were levying entertainment tax, but Maharashtra was not doing so. There are many taxes that businessmen pay to the Centre and to the states. Now with the imposition of entertainment tax in Mumbai, it is almost certain that ticket prices will rise.

The quantum of increase depends on percentage. If 10% entertainment tax is levied, in multiplexes the ticket cost will rise from say Rs 100 to Rs 110. But in a single screen theatre where tickets cost Rs 30-40, maximum Rs 80, even a three or four rupee increase means a lot [to low income families]."


Nitin Tej Ahuja, CEO, Producers Guild of India, said, "I have not reviewed the BMC tax proposal so I am yet to ascertain what it entails and what its implications are. Conceptually, however, we have made many representations to the Central as well as various state govts against local bodies charging entertainment tax.

The underpinning principle behind the introduction of the GST regime was ‘One Nation One Tax’ and one doesn’t understand the rationale why the entertainment industry should be singled out for additional levies. The whole idea behind GST was to subsume all these multiple taxes into one tax."


B N Tiwari, president of FWICE (Federation of Western India Cine Employees) said, "The film and television industry has only recently stabilised after years of pandemic losses and the sharp impact of OTT platforms on theatrical footfall. Any re-introduction of entertainment tax at the municipal level must be handled very cautiously. If the levy directly increases ticket prices, the immediate burden will fall on the common audience, and that
ultimately reduces footfall in theatres -- which again affects workers and daily wage
technicians across the industry."


Tiwari added, "FWICE believes that the objective of revenue generation for the civic body should not come at the cost of revival of cinema exhibition. We request that either the tax be kept nominal or structured in a way that it is not passed on to consumers. Otherwise exhibitors, already struggling with maintenance, electricity and rental costs, will face additional financial pressure. If ticket prices rise, audiences shift faster to digital platforms, and that harms the entire ecosystem -- producers, distributors, theatre owners and thousands of workers."


Tiwari said, "Therefore, any policy must balance civic revenue with protection of employment and theatrical business sustainability. FWICE expects that ticket prices may increase if the tax is directly applied per ticket, unless the govt caps or absorbs part of the levy. Theatres could face further financial strain, especially single-screen cinemas, unless concessions or differential rates are provided."