A moviegoer receiving his bill for tickets. Pic for Representation only
A moviegoer receiving his bill for tickets. Pic for Representation only

The film industry has been left shaken with the government putting cinema services, including tickets, under the 28 per cent tax bracket in the Goods and Services Tax (GST) regime, contrary to their prediction of a five to 12 per cent rate slab. Touted as the biggest tax reform in India, GST was expected to lower the tax burden for the industry, which has recently witnessed tough times with quite a few single-screen theatres shutting shop.

Producer NR Pachisia says, "They are comparing us to the gambling industry. The worst sufferers will be the regional film industries and states with low or no entertainment tax. The industry needs to have a meeting with government officials before the tax is implemented. If not a roll-back, they should consider a reduction."

The business of cinema has not really been great in the past few years and 28 per cent taxation on cinema services has caught the industry off-guard. Ramesh Taurani of Indian Film and Television Producers Council is concerned that footfalls in theatres will dip sharply and in turn, affect box office collections.

Producer Siddharth Roy Kapur, who heads the Film and Television Producers Guild of India, echoes Taurani's sentiments: "It is disheartening that the government does not see the immense contribution that the homegrown film production sector can have in enhancing the soft power of the country. We are one of the only local film industries in the world to have withstood the onslaught of Hollywood so far."

Director Vishesh Bhatt points out that entertainment tax from local bodies has not been absorbed in GST. "Our film industry has provided entertainment for decades largely without government support. This makes watching movies, a basic form of entertainment, a sin. Countries around the world are promoting cinema to support their indigenous talent. Our government is killing art and popular culture."

Among the rare voices to welcome GST is Amit Khanna. The former Reliance Entertainment chief says the industry will benefit from GST in the long run as it will 'pass through credit gains'.