What Will Be The Impact Of GST On The Entertainment Industry?

There is somewhat a mixed reaction from the entertainment industry on GST. The rate of 18% is welcomed by the industry which is currently 28% on the movie tickets. But, this benefit is limited to the tickets priced below Rs. 100 and undisputedly, single screen theatres will be on the gaining side. Single screen owners are delighted with such energy boosting step for their business. They are looking for revival through this milestone change in the tax structure.

The profits of multiplexes will not be influenced much as nearly 5-7% of their income is from the low-priced ticket. Hence, there is no such enthusiasm in multiplex owners about this GST rate relaxation. For them, impact of GST is negated. However, for Maharashtra and Delhi, tickets priced above Rs. 100 used to attract as much as 40% tax in the earlier tax regime. It will be lowered to 28% under GST.

But, this benefit will become unviable as rates on food and beverages are hiked from present 11% to 21% under GST. Hence, multiplex theatres have a little scope to enjoy in this new tax regime. However, they will be able to use Input Tax Credit on products and services. It is the positive side of GST for them.