GST Effect: Additional levy of local taxes set to make entertainment costlier

Movie tickets to get costlier

It is going to get more expensive for moviegoers to watch movies at multiplexes and even at home (on DTH and cable) as states are preparing to authorise local bodies such as municipal corporations, local and district councils to levy additional entertainment tax outside GST ambit. A few states (Maharashtra, Madhya Pradesh, Gujarat and Rajasthan) have stated that they will be charging entertainment tax on cinema, cable and DTH services outside of the GST regulatory framework.

Currently, cinemas have to pay 8-10% entertainment tax while cable and DTH services are taxed at a rate of 10-30% depending upon the state. The GST Council has fixed the rates for movie tickets at 28% GST while cable and DTH services will attract a rate of 18%.

The Maharashtra state government has already introduced a bill in its legislative assembly amending state entertainment tax into local body entertainment tax. Other states Madhya Pradesh, Gujarat and Rajasthan are expected to introduce Bills of their own soon.

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