Regional cinema likely to be hit by 28% GST rate

Year after year, the film business has suffered because of different tax rates levied in different states on film exhibition. Much to the resentment of Indian film industry, cinema will be levied 28% GST as a replacement for entertainment tax as declared by Finance Minister Arun Jaitley. 

The FM refused to assure different tax rates for Bollywood and regional films.

The Hindi film industry is likely to be the biggest beneficiary of GST as the entertainment tax on Hindi films is high as 45 % in states like Maharashtra. For the regional cinemas, not only are the current entertainment tax rates low, but the ticket prices are also capped by many southern states. The GST would put the regional cinema at a disadvantage.

Till now, cinemas in regional languages such as Marathi, Bengali, Kannada and Malayalam have enjoyed a low tax rate in the range of 10-15%. For these regional cinemas, the tax rates would be nearly double.

Like Hollywood, India post-GST will work with figures of gross box office collections, which would lead to better clarity on the actual business done by a film.