The Karnataka Film Exhibitors’ Association (KFEA) has written to the finance minister of India about the anomaly that has crept in in the GST rate reduction on cinema tickets priced at or below Rs. 100. The GST rate for admission prices of Rs. 100 or less than that will attract 5% GST instead of 18% at present.
The letter explains that while exhibitors will be required to charge 5% GST on tickets sold at or less than Rs. 100, the share of collections remitted to distributors by them would attract 18% GST. For example, if a ticket priced at Rs. 100 is shared equally (50:50) between the exhibitor and the distributor, the exhibitor would remit Rs. 50 to the distributor. On this Rs. 50, the applicable GST rate would be 18% (Rs. 9) whereas the exhibitor has collected only Rs. 5 (5%) by way of GST from the ticket buyer on Rs. 100. This mismatch compels exhibitors to bear the additional GST burden out of their own pockets.
The letter adds that this anomaly leads to financial hardship for small and single-screen cinemas besides complicating accounts and compliance.
The letter requests the government to, therefore, bring uniformity in GST rates for the entire film industry — including ticket prices, distribution shares and production revenues. The letter states that a single, uniform GST rate will simplify compliance, remove anomalies and ensure fair treatment of all the stakeholders.
