Bengali film exhibitors in a piquant situation despite state govt’s gesture; to approach GST Council

Report by: 
Rabindra Nath Sinha
13 Jul 2017

Exhibitors of Bengali films find themselves in a piquant situation because of  the incidence of the Goods and Services Tax they will have to bear despite the state government’s offer  of substantial relief from its share of  the GST.

The exhibitors have, therefore, decided to approach the GST Council with a request that it should revisit the tax provision in the interest of regional cinema and save the direct and indirect employment of thousands of people in the business. In fact, according to chairman of the exhibitors’ committee of Eastern India Motion Pictures Association Sunit Singh, ideally the GST Council should exempt regional and award winning films from the levy and if that is really not possible, the lowest rate of five per cent should be made applicable. Under the rate structure in vogue from July 1, tickets priced up to Rs 100 are to attract 18 per cent and for those above Rs 100, it is 28 per cent. 

The Centre and the states are to have equal share of the levy collection, that is, nine per cent each and 14 per cent each respectively. The entertainment tax levied by the state government before July 1 was just two per cent for Bengali  films (also, Nepali, Santhali)  and 30 per cent non-regional films, to be specific Hindi films. The state government   had deliberately kept the tax low keeping in view the none-too-satisfactory state of the Bengali film industry and the dependence of a large number of people on the trade for their livelihood. As the GST rate structure  meant a steep increase  in the payable levy,  the state favourably considered EIMPA’s request  for relief and offered to forego seven per cent  in respect of tickets priced up to Rs 100 and 12 per cent  for tickets  valued over Rs 100. 

What does this amount to? For tickets priced   up  to  Rs 100, the exhibitors would be required to pay two per cent (nine minus seven), the same rate of the  state  government’s entertainment tax up to June 30.  Indeed, it would be the same two per cent for tickets priced over Rs 100 because of the West Bengal government’s offer to forego 12 per cent (14-12).
While speaking to this correspondent EIMPA’s exhibitors’ committee chairman unhesitatingly   conceded that   the state  government had been extremely supportive of their cause. But then, for the exhibitors the final levy would be 11 per cent (the state’s two per cent and the Cente’s nine per cent) for tickets priced up to Rs 100 and 16 per cent ( the state’s two per cent and the Centre’s 14 per cent) for tickets costing over Rs 100. The hit that the exhibitors will have to take is thus obvious  and as Singh contended, it was beyond the paying capacity of the exhibitors.

Interestingly, for Hindi films, the incidence would be lower. This is because before the GST roll-out, the entertainment tax in West Bengal was 30 per cent. Therefore, now   it is 12 percentage points lower   for tickets priced up to Rs 100 and two percentage points lower for tickets priced above Rs 100.
The next meeting of the GST Council has been scheduled for August 5. This will be council’s 19th meeting and the first after the launch of the GST.  It remains to be seen how the council   views the EIMPA appeal.