Moviegoers in could end up paying more for cinema tickets from September 30, when an additional of up to 2% is set to take effect in the state, news agency PTI reported.
In practical terms, the proposed levy could add to the amount consumers pay for a movie ticket, although the exact increase for an individual ticket cannot be determined from the details released by the Multiplex Association of India (MAI). The industry body has raised concerns that the additional charge could make a cinema outing less affordable for consumers.
The MAI on Thursday expressed concern over the Karnataka government’s decision to impose the additional cess. It said the move comes at a time when the cinema exhibition industry is attempting to make theatrical more accessible and encourage audiences to return to theatres.
The proposed cess would be an additional levy on cinema tickets. As a result, moviegoers could see the overall cost of their cinema outing increase once the levy takes effect on September 30.
The MAI has argued that even an additional charge could affect affordability, particularly as cinema tickets are already subject to GST. However, the association’s statement did not specify the final amount a consumer would pay on a ticket after the cess is implemented, PTI reported.
“At a time when the government has been pursuing tax rationalisation and ease of doing business, introducing an additional levy on cinema tickets is counterproductive and ultimately places an additional burden on the consumer. Cinema is a mass entertainment medium enjoyed by millions of families and young people, and every additional tax makes the experience less affordable,” MAI president Kamal Gianchandani said.
The MAI said the proposed levy also runs contrary to the objective of GST, which was introduced to establish a unified indirect tax framework and reduce the cascading effect of multiple taxes and levies across the value chain.
The association said imposing another cess on a transaction that is already subject to GST could result in what it described as a tax-on-tax effect.
“An additional cess imposed on a transaction that is already subject to GST risks creating precisely the kind of tax-on-tax effect that the GST regime sought to eliminate. MAI believes that the taxation framework should instead move towards greater simplicity, transparency and predictability for both consumers and businesses,” the statement read.
The association said it would continue engaging with the Karnataka government and other stakeholders to find a solution that supports the welfare of the creative community while protecting consumer affordability and the long-term growth of the cinema exhibition sector.
The MAI’s objection centres on the potential impact of the additional levy on both consumers and the cinema exhibition industry.
The additional cess of a maximum of 2% on cinema tickets is set to take effect in Karnataka from September 30.
The MAI statement did not provide details of the current cess applicable to cinema tickets in the state. It also did not specify how much the final ticket price would increase for consumers under the new levy.
