The annual licence fee charged by the state govt is set to increase from Rs 1,000 per 100 sqm to Rs 4,500 for the first 100 sqm of the establishment.

Movie tickets likely to get costlier in Ktaka as govt hikes licensing fee for theatres
news Thursday, September 13, 2018 - 16:07

It looks like watching movies at theatres in Bengaluru will prove to be a more costly affair. Movie tickets in Bengaluru, on an average, are already priced higher than other Indian cities. Now, it is likely to go even higher as the annual licence fee charged by the state government is set to increase by three and a half times.

Currently, movie theatre owners pay Rs 1,000 for 100 sqm space of their establishment. This 1,000 fee will be made Rs 4,500 for the first 100 sqm of the area as annual entertainment licensing fee. Moreover, for every additional 50 sqm of space, theatre owners will have to shell out Rs 2,250. Since 1994, the theatres were paying Rs 1,000 for 100 sqm of space and the same rate for the subsequent additional area.

What does this mean?

The hike in annual entertainment licensing fee will mean that the cost for the theatres will be six times more. For example, the fee for a cinema hall of 5,000 sq ft is Rs 2,25,000 as opposed to Rs 50,000.

The licensing fee is being hiked for the first time since 1994 and is necessary for filling the government’s coffers in the light of the Rs 34,000 crore farm loan waiver. Theatre owners, on the other hand, say that the revenue has been going down due to the GST slab of 18% and the decrease in the number of moviegoers with the advent of the on-demand video services by Netflix and Amazon Prime.

Chickpet MLA and owner of Garuda Mall, Uday Garudachar opposed the steep hike in the licensing fee, saying that increasing the ticket prices will be necessary. “Anyway, the occupancy levels of theatres, to my knowledge, is anywhere between 30% to 40%. If the one-time fee is increased by this amount, how do you expect us to manage the expenses without increasing the ticket prices?” the politician-businessman told TNM.

He added, “As a legislator, I understand the importance of increasing taxes for different needs. But the hike should not be so steep that the end consumer also feels the pinch. If there are businesses, the government can earn revenue but in the run, small-scale businesses might have to shut shop, which will affect everybody.”

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