TAXAJ

GST on Media & Entertainment Industry

Entertainment is a big part of our lives. Most of us who work 10-12 hour jobs through the entire week want to go out, watch movies or visit some new places to relax on our days off. In this article, we will discuss the impact of GST rates on the entertainment industry and whether or not it is becoming expensive under GST.

The media and entertainment industries are expanding rapidly with an increasing demand of people seeking entertainment. The sector encompasses cinema, media, events, exhibitions, amusement facilities, gaming zones, etc., either delivered through offline or in online mode. 
  
Prior to GST, the entertainment tax for film industry varied from State to State, ranging from 0% to 110%, with an average of 30%. With the introduction of GST, entertainment tax has been abolished and uniform rates as depicted in the following chart on entertainment services are levied across the nation.
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About This Plan

File your GST Compliances online through us. Get help with GST Filing Procedure, Eligibility and Documents required.

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Timeline

It usually takes 3 to 5 working days.

Services Covered
Who Should Buy
How It's Done
Documents Required
Services Covered

  • Session with TAXAJ Expert
  • Understanding the requirements and needs
  • Filing of Returns and Compliances
Who Should Buy
  • Any business willing to do the mentioned business
How It's Done

    • Purchase of Plan
    • Expert Assigned
    • Upload documents on vault
    • Filing & Compliance as per the need
Documents Required

  1. Name, Contact Number and Email Id of Stakeholder.

  2. Self Attested PAN, Aadhar & Passport size photo of Stakeholder.

  3. Specimen Signatures of Stakeholder.

  4. Latest Electricity Bill/Landline Bill of Registered Office.

  5. NOC from owner of registered office. (If Owned)

  6. Rent Agreement from Landlord. (If Rented/Leased)

  7. Brief description of main business activities of the proposed Company.

  8. Cancelled Cheque in business name (After GST Approval)

All you need to know about GST Applicability on Media & Entertainment Services!

Under the VAT Regime

Currently, the entertainment tax is levied by states and the rates range from 0 to 110%, with an average of 30%.

For End Consumers

Let us understand the impact of GST on the end consumer using movie halls as an example. In movie theaters (multiplexes), food and beverages are taxed at a VAT of 20.5% and an average of 30% tax is levied on tickets, depending on the state. Movie tickets will attract GST at 28%. As food and beverages fall under the supply of food/drinks in outdoor catering, they will attract 18%. 

Thus, we see that the GST rates for the entertainment industry are lower than the VAT and Service Tax.  GST will have a mixed effect on the entertainment industry, depending on the states. For states with a high entertainment tax, GST will be beneficial as it will reduce the prices for the end consumers. However, GST will have a negative effect on states which already have a low entertainment tax.

For Entertainment Industry Owners

Like the end consumers, even the entertainment industry will see a varied impact of GST implementation. Movie theaters and amusement parks may see either a positive or a negative impact depending on the state they are in.

Availability of ITC

ITC will now be available on the services component of activities like catering, renting of premises for movie halls, security costs which were not available under the pre-GST regime. So, the input GST paid when renting a premise can be adjusted with the output GST from selling tickets. 

Thus, the tax burden on the owners of theaters, amusements parks etc. is set to reduce in the coming days.

Additional Tax by Municipalities

Municipal bodies have so far not had any share in entertainment taxes collected by states. However, there are reports that some states such as Madhya Pradesh, Rajasthan, and Gujarat which might ask their local bodies to charge entertainment tax. If local taxes become applicable, then the operating margins and profits, as calculated above, will be affected.

Buying Food at these Places

Most of these entertainment places (movie halls, amusement parks etc.) usually give out contracts to private players to supply food. The service tax currently (pre-GST) is 15%, and the entertainment industry enjoys an abatement of 60% on service tax, i.e., only 40% of the 15% service tax has to be paid.

Conclusion

The impact of GST on the entertainment industry can be both positive and negative, depending on the state. Owners of movie halls, parks etc. stand to gain under GST thanks to the provision of input tax credit. However, the effect of any additional local taxes (if levied) needs to be seen.

GST Rates on Entertainment Services

The following rates have been prescribed for entertainment services such as recreational, cultural and sporting services as given under Notification No. 11/2017-Central Tax(Rate), dated June 28, 2017 and Notification No. 12/2017-Central Tax(Rate), dated June 28, 2017:-

S. No.

Description

Applicable GST Rate

1.

Services by way of admission to or access to circus, Indian classical dance including folk dance, theatrical performance, drama or planetarium.

18%

2.

Services by way of admission exhibition of cinematography films where price of admission ticket is

i) Rs. 100 or less 

ii) Above Rs. 100

12%

18%

3.

Services by way of admission to amusement parks including theme parks, water parks, joy rides, merry-go rounds, go-carting and ballet

18%

4.

Services by way of admission to entertainment events or access to amusement facilities including casinos, race club, any sporting event such as Indian Premier League and the like

28%

5.

Services provided by a race club by way of totalisator or a license to bookmaker in such club

28%

6.

Other recreational, cultural and sporting services

18%

7.

Services by an artist by way of a performance in folk or classical art forms of music, dance, or theatre, if the consideration charged for such performance is not more than Rs. 1,50,000.

Note: The exemption shall not apply to service provided by such artist as a brand ambassador.

Nil

8.

Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo

Nil

9.

Services by way of admission to a protected monument so declared under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958) or any of the State Acts, for the time being in force

Nil

10.

Services by way of right to admission to—

(a) circus, dance, or theatrical performance including drama or ballet;

(b) award function, concert, pageant, musical performance or any sporting event other than a recognized sporting event;

(c) recognized sporting event;

(d) planetarium,

where the consideration charged for right to admission to the abovementioned events or places is not more than Rs. 500 per person.

Nil

The following rates have been prescribed for entertainment services such as recreational, cultural and sporting services as given under Notification No. 11/2017-Central Tax(Rate), dated June 28, 2017 and Notification No. 12/2017-Central Tax(Rate), dated June 28, 2017:-

S. No.

Description

Applicable GST Rate

1.

Services by way of admission to or access to circus, Indian classical dance including folk dance, theatrical performance, drama or planetarium.

18%

2.

Services by way of admission exhibition of cinematography films where price of admission ticket is

i) Rs. 100 or less 

ii) Above Rs. 100

12%

18%

3.

Services by way of admission to amusement parks including theme parks, water parks, joy rides, merry-go rounds, go-carting and ballet

18%

4.

Services by way of admission to entertainment events or access to amusement facilities including casinos, race club, any sporting event such as Indian Premier League and the like

28%

5.

Services provided by a race club by way of totalisator or a license to bookmaker in such club

28%

6.

Other recreational, cultural and sporting services

18%

7.

Services by an artist by way of a performance in folk or classical art forms of music, dance, or theatre, if the consideration charged for such performance is not more than Rs. 1,50,000.

Note: The exemption shall not apply to service provided by such artist as a brand ambassador.

Nil

8.

Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo

Nil

9.

Services by way of admission to a protected monument so declared under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958) or any of the State Acts, for the time being in force

Nil

10.

Services by way of right to admission to—

(a) circus, dance, or theatrical performance including drama or ballet;

(b) award function, concert, pageant, musical performance or any sporting event other than a recognized sporting event;

(c) recognized sporting event;

(d) planetarium,

where the consideration charged for right to admission to the abovementioned events or places is not more than Rs. 500 per person.

Nil