The Brihanmumbai Municipal Corporation has proposed a massive hike in the show tax paid by cinemas in Bombay. The hike is around up to 570% for air-conditioned multiplexes. Contrary to popular belief, this tax does not have a direct bearing on cinema ticket prices as it is levied on cinemas (and not on the public) depending on the number of shows they conduct per month.
The increase in show tax proposed for the various classes of cinemas is as under:
- For air-conditioned multiplexes: the proposed hike is from the present Rs. 60 per show to Rs. 400 per show (570%).
- For air-conditioned single-screen cinemas: the proposed hike is pegged at Rs. 200 per show.
- For non-air-conditioned cinemas: the proposed increase is from. Rs. 45 per show to Rs. 90-200 per show.Regional language films like Marathi and Gujarati are granted 100% exemption from payment of show tax. The proposal seeks to retain a 6% concession for exhibitors who clear their monthly show tax liability in advance by the 5th of every month.
The proposal is pending the approval of the Maharashtra government’s urban development department. In other words, the rates will come into effect only from the date to be specified by the Maharashtra government through a gazette notification. Till then, it is merely a proposal. It may be mentioned here that the BMC Law Committee discussed the proposal on September 22 and sent it back to the administration for reconsideration/reworking, with the Law Committee chair saying that the proposed rates were excessively high.
The BMC currently collects around Rs. 360 crore annually from show tax on cinemas and drama theatres. It intends to scale up this amount to Rs. 500-550 crore.