Movie prices for cinema tickets to decrease due to lowered GST rates, however, there's a hidden condition
The GST Council's recent 2.0 reforms have brought about changes in the tax structure of various goods and services, including movie tickets and premium sporting events such as the Indian Premier League (IPL).
In a move aimed at benefiting the common man, the GST Council has announced a two-tier tax rate system for movie tickets. According to this new system, movie tickets with a retail price up to Rs 100 will now attract a 5% GST rate with input tax credit, a significant reduction from the previous 12%. However, it is important to note that this reform does not apply to movie tickets priced above Rs 100, which will continue to attract an 18% tax rate.
The Multiplex Association of India (MAI) had previously appealed to the government to place movie tickets priced up to Rs 300 under the 5% tax slab. While the reform does not go as far as the MAI's appeal, it is a step towards making cinema more affordable for audiences and supporting theatre owners.
The GST 2.0 reform does not affect the input tax credit for movie tickets above Rs 100. This means that businesses involved in the sale of high-priced movie tickets can still claim input tax credit on their purchases.
On the other hand, the GST 2.0 reform will only affect IPL matches, a premium sporting event. The ticket prices for IPL matches have seen a significant increase due to the GST 2.0 reforms. A Rs 1,280 IPL match ticket will now cost approximately Rs 1,400, seeing a more than Rs 100 jump. A Rs 500 IPL ticket will now cost Rs 700 due to the 40% GST slab, while a Rs 2000 IPL ticket will rise to nearly Rs 3000.
It is important to note that the GST 2.0 reform does not apply to travel, gyms, style, or beauty products, which have become cheaper due to the GST cut. International cricket matches remain mostly unaffected with a standard 18% GST.
In conclusion, the GST 2.0 reforms have brought about changes in the tax structure of movie tickets and IPL matches. While movie tickets priced up to Rs 100 have become cheaper, IPL match tickets have seen a significant increase in price. The aim of the reforms is to benefit the common man, and it remains to be seen how these changes will impact the cinema and sports industries.
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