New tax regime to hit Rajasthani cinema; relaxation only through ‘grandfathering’

Rajasthani movies may be hit hard with the new tax regime of GST and the high rate of tax. GST council has decided on 28 per cent GST on movie tickets and 18 per cent on movies having ticket price less than Rs 100 which will make viewing the Rajasthani movies costlier.

Currently, in the state, movies are free from entertainment tax, this was done a few years back to promote the making and viewing of Rajasthani movies. However, GST has not made any distinction between the regional cinema and Hindi movies. As such, this sector which was not paying entertainment tax may now have to pay 28 per cent tax at the big centres like Jaipur while in small towns and villages where the cost of tickets is less than Rs 100, the tax rate will be 18 per cent.

Even though the government made the distinction of tickets costing less than Rs 100 attracting 18 % GST, the regional cinema in the state got an exemption from entertainment tax which was 30 per cent. “This new tax regime will hurt the regional films including Rajasthan. In our state, not many movies in local language are made but southern states, where the regional films are a big industry, will be affected,” said a leading movie distributor of state speaking to dna. The movie makers are also not happy with the development.

However, there is a silver lining, sources in the department of finance informed that indirectly the industry may be given some relaxation in the way of reimbursement under the clause of “grandfathering”.

Under this, grants may be given if there is any proposal on it, “There won’t be any current exemptions but GST council has said that it can be given indirectly by way of grants known as grandfathering,” said a source speaking to dna.