Dont't club cinema with gambling, lower tax rate: MAI

Multiplex Association of India today asked the government to reconsider 28 per cent rate fixed for film industry under the new GST regime, while objecting clubbing the sector with racing, gambling and casinos.
The association said cinema is a primary form of entertainment for the masses and needs to be supported in the form of a lower rate of tax rather than treating it as a vice or a sin.
"We had expected the GST rate for cinema to be either 5 per cent or at worst 8 per cent. Under the circumstances, we are completely shocked, that the GST Council has decided to tax cinemas at the prohibitive rate of 28 per cent," it said in a statement.

This is the same as the rate recommended for racing, gambling and casinos, Multiplex Association of India (MAI) said.
"We are stunned to note that the GST Council considered it appropriate to tax this clean and wholesome form of family entertainment, as a vice or a sin," it added.
Globally taxes on entertainment are usually in single digits since entertainment is seen to be an essential ingredient of social infrastructure, the association said.

MAI claims to represent around 80 per cent of multiplex industry in India. Its members operate more than 500 multiplexes with more than 1,800 screens across the country.

The association said there would be incidence of dual taxation as entertainment tax levied by local bodies would be outside the GST framework.
"This dual taxation at prohibitive rates would not only lead to substantial increase in ticket prices for cine-goers, but could well sound the death knell for the film industry, which already is faring quite badly, due to the continuous onslaught of piracy," it added.