The entertainment tax has become a bane for the Kannada film industry.

GST effect Karnataka govt may reimburse tax on Kannada movies tickets
news GST Monday, May 22, 2017 - 09:27

With the implementation of the Goods and Services tax from July 1, eating out and entertainment is likely to get more expensive in Karnataka.

The state government is considering ways to help the local industries. To specifically help the Kannada film industry, the government is looking to formulate a policy that will extend some relief for the local film industry. 

According to a report by the Times of India, the government may reimburse the tax collected by the government on Kannada movie tickets.

“Now that the GST Council has announced the tax rates, various sectors have been expressing their concerns. While the government is well aware of specific issues such as those related to the Kannada film industry , we will take necessary steps in due course,“ said Arvind Srivastava, secretary to the finance department told TOI.

Currently, Kannada films are exempted from tax, while a 30% tax is levied on films of other languages. The tax on the ticket for other language films comes to 45%, with 15 % service tax added to the entertainment tax.

While the entertainment tax has become a bane for the Kannada film industry, films of other languages have received a breather as the tickets are now classified under a 28% slab.

According to Sa Ra Govindu, President of the Karnataka Film Chanber of Commerce, the GST has dealt a death blow to Kannada films as many people in the city prefer watching Telugu, Tamil, Hindi and English films as opposed to Kannada ones.

“The GST will just make it worse as the competition will get higher. We have written to the Karnataka government to look for a solution. If the government does not come up with one soon, the entire Kannada film industry may just collapse,” Govindu told TNM.

The entertainment tax of 28 % comprises 14% State Goods and Services Tax and 14% Central Goods and Services Tax.

The state government is now mulling over reimbursing the SGST, the TOI report added.

The GST Council has given state government options to decide on whether they want to levy the tax or exempt the said category from tax.

Apart from the entertainment industry, the non-AC restaurants have also come under duress. 

The GST slab for all restaurants will be 12%. This is a major hit for non-AC restaurants as the current tax rate being levied on them is 4% of composite tax, which is not collected from customers.

The Bengaluru Hoteliers Association told TNM that all restaurants across the city will be shutdown on May 30 as a sign of protest for the hike in tax slab.

P C Rao, Vice President of Bengaluru Hoteliers Association said that the protest will urge the Centre to classify AC and non-AC restaurants and bring the non-AC ones under the 5% tax slab.


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