Theatres had earlier told the government that they were willing to absorb the GST within the Rs 120 price cap if the Municipal Tax was removed.

TN film-goers taken for a ride Theatres push 28 GST burden on customers
news GST Friday, July 07, 2017 - 20:25

Even as the dust settles on the strike called by theatre owners across Tamil Nadu, movie-goers were in for a rude shock on Friday.

Customers who visited multiplexes and single screen theatres found that that they were shelling out more money for tickets that are capped at a maximum of Rs.120. In the revised pricing, the Goods and services Tax is charged over and above the original price of the ticket.

So, if a ticket was priced at Rs.120 before, the film-goer will pay slightly more than Rs.153 for it now, with 28% GST. A GST of 18% will be charged for tickets priced at Rs. 100 or less. That would mean that a Rs.100 ticket will cost upto Rs.118 and Rs.85 ticket will cost close to Rs.100.

This move comes despite no formal change to a Government order that dictates that the minimum price for a ticket in the state should be Rs.10 and the maximum should be Rs.120.

When the Tamil Nadu government agreed to withdraw its Municipal Tax and the strike was called off by theatre owners, no mention was made of what the final ticket prices would be. Now, however, theatre owners have implicitly transferred the entire GST burden onto customers, without this being formally agreed to by the government.

While the price caps were to be inclusive of the GST, according to some news reports, theatre owners claim that was never the case. 

"We are charging 28% on Rs 120, which is correct according to the GST Act. It is legal and we are following it," said Abirami Ramanathan, Tamil Nadu Cinema Theatre Owners Federation President.

Nikilesh Surya, the owner of Rohini theatres, also said, "The theatres are charging 28 per cent on the base price which is Rs. 120. There is nothing wrong in it. Earlier, we had entertainment tax which is a local tax and that is why it was charged in Rs. 120."

Theatre owners had gone on strike against the TN government’s decision to impose 30% Municipal Tax over and above the GST. They claimed that this will double taxation will rob them off 60% of the ticket price, thus suggesting that the burden of the new taxes would fall on theatre owners. However the previous tax regime included VAT and other local taxes within the Rs.120 cap. 

 

 

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