Mahesh Babu's AMB Cinemas lands in trouble over Rs 35 lakh GST fraud

Mahesh Babu's superplex AMB Cinemas has come under the scanner for profiteering illegally to the tune of Rs 35 lakh by not transferring the benefit of reduced GST rates to consumers.

The government had announced in December 2018 that GST rate would be reduced from 28 per cent to 18 per cent on tickets priced above Rs 100. But the Rangareddy GST Commissionerate came to know that some cinema halls had not reduced prices and passed benefits to movie buffs. AMB Cinemas was one of those theatres.

"GST on movie tickets was reduced by Centre with effect from January 1, 2019. AMB Cinemas did not reduce the ticket price despite GST on movie tickets brought down from 28 per cent to 18 per cent on tickets priced Rs 100 and above. Upon inspection by GST Hyderabad officials, it was found that many theatres had not reduced the price," The Times of India quoted a source from the GST Commissionerate as saying.

According to GST officials, action will be taken against AMB Cinemas if it fails to deposit Rs 35 lakh to the consumer welfare fund. "AMB Cinemas reduced the prices after almost a month (since Centre's notification) in February. The undue profit they have accrued by pocketing a differential amount from moviegoers in January has to be paid back to the consumer welfare fund," the source added.

But the management claimed that the figures were inflated. "The figure of Rs 35 lakh is inflated, the actual figure would be around Rs 20 to 25 lakh. However, immediately after we came to know that PVR Cinemas had reduced their ticket prices, we too did the same from Rs 200 to Rs 185 at the end of January," a top functionary from Asian Cinemas told TOI.

They also claim that the state government did not issue any order on fixing the ticket prices. Hence, theatre managements approaching the high court to get the price fixed.

"We have a fresh order from the Telangana High Court which has fixed the Rs 170 with an additional Rs 30 as GST, which makes a total of Rs 200. We will be implementing the order from February 22," added the functionary.