Siddharth Roy Kapur, the president of Film and Television Producers Guild of India (FTPGI) said the government's GST rate of 28% on film tickets would incur huge losses to the film industry.
Union Finance Minister Arun Jaitley revealed the details of the GST rates for various services and items on Friday, May 19. But his announcement has come as rude shock for the people in the film industry. Siddharth Roy Kapur has released a statement to the media, expressing his disappointment. "The GST rate of 28% announced on cinema tickets is a huge setback for the film industry," read his statement.
Kapur led a team of FTPGI recently to meet representatives of the government, seeking to bail out the struggling film industry and the latter had assured support. "The industry had proposed a rate of 5% in our representations to the Government, in order to revive a business which has been struggling from lack of fresh investments in new cinema screens and a significant increase in online piracy," Kapur said.
"In the existing tax regime, the cinema exhibition sector was exempted from service tax and state VAT, and entertainment tax was the only tax imposed on cinema tickets by states and local bodies," he added.
When the film industry was expecting support, the government has taken adverse steps that would incur huge losses. "The average entertainment tax collected nationally by the government across all states and languages was in the range of 8-10% of gross box office revenue. Hence logically the GST rate should not have been more than 12%, in order to avoid any exchequer loss," Siddharth says.
Instead, the government has equated the film sector with the gambling and betting industries and taxed it at the highest slab of 28 percent, in addition to which local bodies across states have also been empowered to impose entertainment tax, which was earlier to have been subsumed within GST," the FTPGI president said.
Kapur also did not hide his disappointment with the government. "It is disheartening that the government does not see the immense contribution that a vibrant "Make In India" film production sector can have in enhancing the soft power of the country. We are one of the only local film industries in the world to have thus far withstood the onslaught of Hollywood," he said.
A GST of 28 per cent will land the film industry in a bigger trouble, Kapur felt. "Unfortunately, with such a lack of interest and support from the government, the Indian film industry which should be one of the primary forms of cultural outreach from India to the rest of the world, finds itself in real danger of coming undone," he said.
