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Cheaper movie tickets if states reduce tax
Tuesday, September 18, 2007 11:06 [IST]
PTI

New Delhi: Movie-buffs can now hope to enjoy their visit to cinema halls without loosening their purse strings if the Information and Broadcasting minister succeeds in persuading states to reduce entertainment tax on films.

Minister of Information and Broadcasting P R Dasmunsi, who will be meeting the information ministers from all states tomorrow here, will try to convince that entertainment tax on the films should be minimised for an unstunted growth in Indian cinema, the ministry sources said.

Depending on the location of theatre in the states, the movie-goers pay anywhere between 40 to 100 per cent tax on a ticket, making India a "highest entertainment taxed" country in the world.

This is in contrast with other industries where excise duty is capped at 16 percent and service tax at 15 percent. Average entertainment tax rates in the neighbourhood are between 10 and 15 percent.

As entertainment tax is the state subject under the Constitution, every state has its own tax regime. The film industry has often complained of multiplicity, unrationalised and obsolete tax structure, which has been subject to the whims of each state government.

Besides a hefty entertainment tax, which nearly doubles the cost of the ticket, the film industry also coughs up 12.5 sales tax or VAT (value added tax) on the eatable and drinks sold in the intermission, 12.36 service tax on the advertising revenues, 12.5 VAT on the distributor payouts, 12.36 service tax on the property rentals.


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