Senior Vice-President, Production And Distribution, Krian Pictures
The GST bill has finally been passed and is being hailed as a historic development in India. The implementation of this bill is expected to regularise the complex tax structures which exist today, and will standardise the business modalities to a great extent. However, inspite of numerous representations made by prominent industry personalities and entities to streamline the entertainment tax structure for the film industry, the government is yet to give this aspect its due attention. In the current form the entertainment tax across the country is a state government controlled component, with the percentage varying across various regions. While there is a ticket rate ceiling in some states, with the absence of this in the others, the average consumer bears the brunt of an inflated gross ticket value with the various categories of taxes also imbedded within it. Ideally the GST should immediately benefit the film industry as well, and there should be an immediate dialogue initiated by film industry big-wigs with the government authorities to identify the implementation mechanism of this bill in the context of cinema tickets, shooting permissions, technical and creative services etc. The endeavour should be to lower the burden on the consumer, in terms of cinema ticket pricing, and also lower the risks involved in producing films, by controlling costs, thereby improving yield margins. In the current climate, there seems to be strong possibility of GST being the first step towards positively impacting the entertainment industry. Fingers crossed.
Head – Global Revenue, Essel Vision
With the GST Bill being passed by the Parliament this certainly brings cheer to all us industry folks…but I am really keen to see when the same will actually be rolled out. Yes we will get standard ETAX rates now across the country but what about those which are already ETAX free. Also double taxation will be wiped out but I hear that the GST for entertainment may have a provision that local government bodies or lower municipal bodies may have the power to charge extra taxes or whatsoever. So personally for me it’s a wait and watch situation let all the guidelines come out and then maybe we can celebrate. So till then let our champagne bottles be in the refrigerator waiting to be popped soon.
Managing Director, Muviwale Entertainment
According to me the GST will affect the film industry in a positive manner and also have adverse effect to some extent too. I presume the Entertainment Tax (ET) applicable on theatrical revenue will be replaced by GST and thus many states will benefit as the average ET is around 30 per cent which will now be replaced by GST which will be around 15 per cent-18 per cent thus a benefit of approximately 12 per cent-15 per cent on an average. This change will benefit the audience as it will reduce the ticket pricing by 10 per cent-12 per cent and also increase the revenue of distributors and exhibitors thus increasing the revenues of producers as well.
In case of non-theatrical revenue where Service Tax and VAT is applicable, the adverse effect will show as Service Tax is 15 per cent and VAT is 5 per cent. Here if both are applied in one bill and are replaced with GST then its advantageous but where only one of the two are applicable then the tax may increase. Also the production will have to face 18 per cent GST instead of 15 per cent ST as of now, which is high.
Overall as major revenues of the film industry come from theatrical collections we will stand to gain more then we lose, thus for us it’s a win-win situation for sure, rest we will have wait and watch till the final implications come into force as to what will be the exact amount of gains in case there are any changes in the rates.
MD, Mukta Arts
GST will have an extremely positive impact on the entertainment industry and in particular the Indian film industry. As GST replaces a whole host of separate taxation and by effect reduces the total tax burden on the industry we can look forward to higher profit as the industry will keep more of its revenue. Particularly multiplex business will see an extremely positive impact as high rates of entertainment tax will be replaced by a one rate GST. Efficiency will also increase as will transparency, as the industry will now have to deal with only one tax and not a bouquet of many others. The largest advantage for the country as a whole is the creation of a single common market, which will ultimately benefit all the businesses.