Multiplex owners demand uniform entertainment tax

Multiplex owners demand uniform entertainment tax

MUMBAI: The multiplex owners in India are looking forward to uniformity of entertainment tax in the union budget 2008-09. The other things they are insisting on are decrease in service tax on lease rentals.

"The rates of entertainment tax are amongst the highest in the world. Most states levy an entertainment tax ranging from 30 to 50 per cent of ticket sales. The average rate of entertainment tax across the world is around 10 per cent of ticket sales," said E City Ventures (Fun Republic) MD Atul Goel.

Multiplex owners are awaiting abatement of 67 per cent for service tax on rent so that effective tax rate reduces to 4 per cent.

They feel as the high rate of entertainment tax still exists, the domestic cinema exhibition industry also pays sales tax on food and beverage. Multiplex owners say that they are forced to pay multiple taxes which include property tax on real estate that it occupies, service tax on advertising revenues, show tax on the number of shows held and income tax on net profits.

Cinemax India CFO Jitendra Mehta says, "We await abatement of 67 per cent for service tax on rent so that effective tax rate reduces to 4 per cent."

Echoing Mehta, Goel adds that the service tax introduced on lease rentals for cinema exhibitions will virtually kill this industry, and, in turn, the entire film industry. He thinks that the entertainment tax structure needs to be re-looked to benefit the overall cinema infrastructure.

Multiplex owners are demanding a one indirect tax regime. They insist that indirect taxation of goods and services should be integrated into the Goods and Service Tax (GST). Besides entertainment tax on cinema tickets should be integrated into GST.

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