AMB Cinemas, a joint venture between actor Mahesh Babu and the Asian Cinemas, paid Rs 35 lakh to the Rangareddy GST Commissionerate on Thursday for allegedly violating GST norms after it failed to reduce ticket prices despite revised rates coming into effect from January 1, 2019. The theatre, located in Kondapur in Hyderabad, had received a show cause notice on Tuesday to cough up the amount for alleged profiteering.
Starting January 1, the GST Council had said that tickets worth Rs 100 and above would fall in the 18% tax bracket instead of the earlier 28% while for tickets less than Rs 100, it would fall in the 12% tax bracket instead of the earlier 18%.
According to media reports, the representatives of AMB Cinemas had informed the GST officials that they didn’t reduce the ticket rates because they were under the impression that the ticket prices are controlled by the state cinematography law. They added that they started collecting ticket fares according to the new norms with effect from February 6 when they came to know about the requirement of reduction.
The Rs 35 lakh paid to the GST Commissionerate amounted to the profits AMB Cinemas collected during the period from January 1 to February 5. The amount was transferred to the State Consumer Welfare fund.
The GST Council appreciated the effort of the organisation in paying back the amount and especially for being the ‘first in the country to return the element of unjust enrichment for the benefit of consumers’.
Meanwhile, similar notices were issued to the managements of other multiplexes and single-screen cinema theatres that indulged in GST violations in Hyderabad and Secunderabad.
AMB Cinemas, acronym for Asian Mahesh Babu Cinemas, the Tollywood actor’s first venture into the film exhibition business, was officially inaugurated and opened for theatre-goers in December last year. Asian Group is one of the leading film distribution companies in the Telugu film industry and it’s their first joint venture with Mahesh Babu.