NEW DELHI: The Indian Motion Pictures Producers Association (IMPPA) has urged the government to fix 5 per cent as the maximum GST rate that should be charged on all goods and services connected with the entertainment industry including entertainment tax.
In a letter to finance minister Arun Jaitley, IMPPA President T P Aggarwal said, “This will provide life to an industry which is being crushed under the heavy burden of tax and which needs immediate help and support of the government to survive”.
Pointing out that IMPPA was the oldest body of filmmakers having been set up in 1937, Aggarwal said the film industry has been burdened with the extreme end of high GST.
“In all other products, tax is levied after recovery of cost of production as well as input credit where all taxes and GST paid are adjusted in the GST payable,” he added. But in the film industry, GST has to be paid on goods and services as well as on sale of tickets irrespective of the fact whether the expenses incurred on making the film along with taxes paid thereon have been recovered or not.
GST in the form of entertainment tax has to be paid on the sale of tickets from the first ticket onwards where it has been fixed at the highly unreasonable level of 18 per cent for tickets up to Rs 100 and 28 per cent for tickets more than Rs 100.
The letter said that the imposition of uniform 18 per cent GST on majority of goods and services is also largely responsible for the miserable state of the film industry because very few films are profitable propositions and majority of films are disasters leading to the annihilation of the producers.
Aggarwal wrote that the government should be “providing free entertainment to the people who pay so many taxes.” Instead, it levies heavy entertainment tax which has to be paid by the poor citizen on films. Producers deserve to get the full money since the films are self-financed without any government aid.
He said that very few hit films make money while the rest are reeling in losses. Meanwhile, both the central and state governments cash in by imposing GST at every level. He demands that the practice of state governments choosing their own amount of entertainment tax must be abolished.
