GST effect: Multiplexes vs single-screens
Tickets costing Rs 100 or below will come under 18 per cent GST rate, as opposed to the 28 per cent proposed earlier.
Mumbai: The revised Goods and Services Tax (GST) rate on movie tickets signals a cause for worry as far as multiplex owners are concerned.
On June 12, the Centre revised GST rates on 66 items, including movie tickets. Tickets costing Rs 100 or below will come under 18 per cent GST rate, as opposed to the 28 per cent proposed earlier. This heralds good news for single-screen owners, a large chunk of whose tickets are usually priced below Rs 100.
At the same time, tickets above Rs 100 will continue to attract 28 per cent GST rate. According to an article in the Economic Times, multiplexes, which gather a maximum of 5 to 7 per cent of their revenue from tickets priced below Rs 100, will not benefit from this tax revision.
However, in cities like Delhi and Maharashtra, where the current tax rate on movie tickets is 40 per cent, the GST tax rate means good business. At the same time, this gain might be countered by the 21 per cent GST on food and beverages, which is higher than the existing 11 per cent rate.
On the brighter side though, multiplexes would be able to claim input tax credit on products and services, multiplexes would be able to claim input tax credit on products and services they use.