The GST Council earlier this week reduced the GST rate on food items sold in cinemas from 18% to 5%. However, the new rate of 5% will be applicable only if food items are ordered separately rather than combined with the cinema ticket. When the ticket and the food items are bought together, it is treated as a composite supply, the GST on which would continue to be 18%. That is because the GST on cinema tickets is 18%.
Central Board of Indirect Taxes and Customs chairman Vivek Johri said, “As long as tickets and food items are billed separately, they will be charged at different GST rates.” It is to be seen whether cinemas and multiplexes pass on the benefit of the reduced GST rate on food and beverages, to patrons.
