New Delhi: The Goods and Services Tax (GST) Council, in its 50th meet on July 11, effected a major change in tax rates for eating & dining outlets in theatres & multiplexes and is rightfully getting good response from cinegoers as well as multiplex owners.
The GST Council headed by Finance Minister Nirmala Sitharaman brought down the tax rates for dining in cineplexes from 18% to 5% bracket, a sharp drop by 13%.
This will reflect sharply in the food & beverage bills of movie-goers and they are quite delighted at the tax rate revision. The movie-watching experience will not just become cheaper but will draw more crowds to theatres.
Food and beverages form an important revenue generating source for the cinema industry, especially for the multiplexes who earn upto 35% of from this segment.
Cinema Experts also believe that this move will give much-needed impetus to the multiplex industry in reviving its businesses. Post-Corona period, the multiplexes have been struggling, not just with dipping footfalls but also poor turnout of audience even for blockbuster films.
Multiplex owners welcome Centre’s move
The cinema industry welcomed the GST Council’s decision to bring the munching in multiplexes under ‘restaurant service’, thereby making 5% GST tax applicable to them, as earlier of 18%.
“This will help resolve industry-wide issue for the sector which includes more than 9,000 cinemas across the country in avoiding disputes/ litigation from a GST standpoint,” PVR INOX Ltd CFO Nitin Sood said.
The film industry along with multiplexes went bleeding after the Covid-19 pandemic. During the pandemic, they remained closed and when opened had to follow restrictions. It was only after March 2022, they stared operations with 100% capacity but the poor turnout of audience in theatres left them incurring big losses.
The country had more 9,000 cinema screens before pandemic but many closed down after the pandemic due to financial crisis.