The Goods and Services Tax (GST) Council headed by Union Finance Minister Arun Jaitley, on Friday said that the theatres across India will be taxed at 28 percent. How is this going to affect the industry? Would the ticket prices be hiked?
Two-time National Award Winning Writer, Film Producer, Distributor and Founder of BOFTA Film Institute Dhananjayan Govind talks to Behindwoods about what GST is, its Pros and Cons and much more.
"Firstly the GST rates are announced only for cinema ticket prices and hence too early to comment unless the tax rates are announced for services. GST means Goods & Services Tax. As of now, we have the clarity on taxes for Goods (cinema tickets). Let us wait for services (which is services by artistes, technicians, laboratory, various production related services) to know the exact impact of GST on the overall business."
1. Are you personally happy with GST implementation?
"I strongly feel film industry should be supported by the Government as it is done by Govt. of China to grow than treating it as luxury and clubbing it with Clubs. Right now for Cinema tickets, the GST @28% is too high as it is clubbed with Clubs and Casinos as if it is only entertainment like gambling. The Govt. of India should give support to the film industry to grow and hence the new GST announced for cinema tickets at 28% is way too high."
2. Pros and Cons of GST?
"Henceforth filmmakers need not worry about U or U/A for their films as from 1st July no more tax exemption is there. The Entertainment tax is clubbed under GST and hence both ticket sales and services are chargeable. Hence, to that extent, it is a benefit to the industry as filmmakers can be free to make the film the way they wish (and give even English title) and do not worry about U or U/A and need not go through the tax exemption process."
"Negative is the high GST rates at 28% for cinema tickets. We have to wait for the services tax rate and let us wait for the same."
3. Can you please elaborate about the complications involved in the implementation of GST?
"This can be explained through a seminar."
4. Who will bear GST? Distributors or theatre owners? Which of these 2 players will be affected the most?
"Everyone will be impacted by GST as it covers everyone, not just one player. Right from cinema owners to distributors, exhibitors to producers, technicians, and artistes."
5. Will GST change the overall terms between a theatre owner and a distributor?
"We should wait for the tax rates to explain how it will change. Right now too early to comment."
6. With the implementation of GST, would the audience have to pay more than 120 rupees for a ticket?
"Yes. The audience has to pay extra. Rs.120 + 28% GST = Rs.153.20 will be the ticket price in multiplexes. This is compulsory from 1st July."
7. Will GST force theatre owners to depend more on F&B, internet charges and other means of profit avenues?
"Nothing like that. Despite high ticket prices, the audience went and watched films like Baahubali 2 in theatres and paid even Rs.300 to 500 in Andhra Pradesh/Telangana. Hence, it is all about films. If the film is good, they will watch in theatres and won't mind slightly high charges due to GST."
8. Can we expect a change in censor certification process? No more fights for U certificate tags, right?
"No connection between censor and GST. Censor will do what is applicable and GST will follow as per its new slabs."
Avinash Pandian