Industry, cinema owners and audience rejoice the reduction of GST on movie tickets

For the Indian film industry, Christmas came early as the government decided on lowering GST on cinema tickets a while ago. The exhibitors, producers and distributors’ happiness knew no bounds after this was announced. As per the new rule, tickets below Rs 100 will have 12 per cent GST (was 18 per cent earlier) while tax on tickets above Rs 100 has been brought down from 28 per cent to 18 per cent now.The change will be effective from Jan 1, 2019 and cinema enthusiasts as well as those from the cinema industry are overjoyed already. “With this, the profit sharing will increase. After the MoU signed with the Producers Guild, it was decided that till the new government is formed in Madhya Pradesh, the exhibitors will be bearing the entertainment tax. Due to this, the cinema halls were on a strike in the state earlier,” says Deepak Simhal, president of Bhopal Cinema Association.
Producer and director Fauzia Arshi feels that this change has come as a boon for small producers. She says, “The GST was followed by demonetization which shattered the film industry. Most of the small production houses had to shut down as bearing 28 per cent GST hit them hard. Right from exhibitors, producers and directors, the entire chain was affected,” says Fauzia, adding, “It will eventually take some time to stabilize, but a ray of hope can be seen now.” To this, another producer, Rajaram Patidar, says, “This will not only strengthen the industry but will also motivate professionals to come up with better ideas. The market post-GST and demonetisation was so low that surviving became difficult. We hope movies with good content will make a comeback and the audience will get to watch good movies.”

For exhibitors, this is a new beginning of sorts. While the single screen owners had to incur a lot of loses during the cinema strike, they feel that conditions will be favourable for them now. “The tax percentage has been lowered and that’s a welcome move. The rate of the tickets will stay the same for the time being, but the New Year will see change in the equation,” says Ashwini Agrawal, owner of Bharat Cineplex. Adding to this, multiplex owner Sandarbh Gupta says, “The impact is definitely going to be good. Maximum profit will be enjoyed by the movie buffs as the tickets will become more pocket-friendly. As a theatre owner, I feel that instead of keeping different tax slabs, the government should merge them into one. That would be beneficial for us as the recordkeeping and accounting work would become much easier.”

Producers Guild welcomes this move
Siddharth Roy Kapur, President of Producers Guild of India, shared his statement via a press release that reads, “On behalf of the Indian film industry, I would like to thank the government for taking this progressive step. This will help the industry move forward positively with increased investments in exhibition infrastructure and creative development, enabling even better cinema and greater screen density across the country. We look forward to continuing to engage with the government on initiatives that will help to unleash the full potential of the film industry. Cinema can be a significant instrument of Indian soft power around the world while continuing to act as a uniting force for all Indians, a role it has played for more than a century.”