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 Industry is a dynamic and rapidly growing sector in India, encompassing diverse services such as film production, broadcasting, print media, digital streaming, event management, and advertising. With the introduction of the Goods and Services Tax (GST), the taxation framework for this sector has seen a significant overhaul, aiming to streamline taxes and bring uniformity. However, understanding the GST implications for various segments of the media and entertainment industry can be challenging due to the varied nature of services involved. In this comprehensive guide by Team TAXAJ, we delve into the GST rates, Input Tax Credit (ITC) rules, compliance requirements, and specific considerations for businesses in the media and entertainment sector.
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All you need to know about GST Applicability on Media & Entertainment Services!
GST Applicability on Media and Entertainment Services
Under the GST regime, the media and entertainment industry is broadly categorized into the following segments:
- Film Production and Distribution
- Television Broadcasting and Digital Streaming
- Print Media and Publishing
- Advertising Services
- Event Management and Live Performances
Each of these categories has specific GST rates and compliance requirements, making it essential for businesses to understand the applicability based on the nature of their services.
GST Rates for Media and Entertainment Industry
The GST rates applicable to various services in the media and entertainment industry are as follows:
| Service Type | HSN/SAC Code | GST Rate | Details |
|---|---|---|---|
| Film Exhibition (Multiplex Theatres) | 9996 | 18% | Applicable on movie tickets priced above ₹100. |
| Film Exhibition (Non-Multiplex Theatres) | 9996 | 12% | Applicable on movie tickets priced up to ₹100. |
| Film Production Services | 9985 | 18% | Includes services like editing, dubbing, and post-production. |
| Television Broadcasting Services | 9983 | 18% | Includes satellite and cable broadcasting services. |
| Digital Streaming Services (OTT Platforms) | 9984 | 18% | GST applicable on subscription fees. |
| Print Media Advertising | 9983 | 5% | Lower rate applicable for advertisements in newspapers. |
| Television and Digital Media Advertising | 9983 | 18% | Includes ads on TV, OTT, and digital platforms. |
| Event Management Services | 9985 | 18% | GST on services related to concerts, exhibitions, and corporate events. |
GST on Film Production and Distribution
GST on Film Production and Distribution
The film industry, comprising production houses, distributors, and exhibitors, is a major part of the entertainment sector. Under GST:
- Film Production Services: GST at 18% is applicable on services related to film production, including editing, sound mixing, and dubbing.
- Film Distribution: Distribution services are taxable under the GST framework. GST is levied on the revenue earned from film distribution, typically at 18%.
- Exhibition of Films: Movie tickets are subject to GST. For tickets priced up to ₹100, the GST rate is 12%, while tickets priced above ₹100 attract 18% GST.
Example:
If a movie ticket costs ₹120, the applicable GST at 18% would be ₹21.6, making the total ticket price ₹141.6.
GST on Television Broadcasting and Digital Streaming
Television broadcasting and digital streaming services (OTT platforms) are essential components of the media industry. The GST implications include:
- Television Broadcasting: Services provided by satellite TV channels and cable operators attract 18% GST.
- Digital Streaming Services: Over-the-top (OTT) platforms like Netflix, Amazon Prime, and Disney+ Hotstar charge 18% GST on subscription fees. The GST is collected from consumers as part of the subscription pricing.
Input Tax Credit (ITC) for Broadcasters:
Broadcasters can claim ITC on GST paid for inputs like studio rentals, equipment purchases, and production costs, helping to offset the overall tax liability.
GST on Print Media and Advertising
The print media sector, including newspapers and magazines, has a distinct GST structure:
- Print Media Advertising: Advertisements in print media are subject to 5% GST, which is lower than the standard rate for digital and TV ads (18%).
- Circulation of Newspapers and Magazines: The sale of newspapers and magazines is exempt from GST, provided they do not include any commercial ads.
GST on Event Management Services
GST on Event Management Services
The event management industry, encompassing services like corporate events, weddings, concerts, and exhibitions, falls under the 18% GST category:
- Event Planning and Execution: GST at 18% is charged on the total value of services provided by event managers, including venue rentals, catering, and entertainment services.
- Live Performances and Ticket Sales: Tickets for live performances, such as concerts and theatrical shows, attract 18% GST, unless exempted under special government notifications for cultural events.
Input Tax Credit (ITC) for Event Managers:
Event managers can claim ITC on expenses related to venue rentals, equipment, and other input services used in organizing the event.
GST Compliance for Media and Entertainment Businesses
Businesses in the media and entertainment industry must adhere to strict GST compliance requirements, including:
- GST Registration: Mandatory for businesses exceeding the annual turnover threshold of ₹20 lakh (₹10 lakh for special category states).
- Invoicing: Proper GST invoices must be issued, specifying the HSN/SAC codes and applicable GST rates.
- Filing GST Returns: Regular filing of GST returns (GSTR-1, GSTR-3B, and GSTR-9) is required, along with detailed reporting of sales, purchases, and input credits.
- Record Keeping: Maintaining comprehensive records of income, expenses, and GST payments is crucial for audit purposes.
Input Tax Credit (ITC) in Media and Entertainment
The Input Tax Credit (ITC) mechanism allows businesses to claim credit for the GST paid on inputs used in their operations. In the media and entertainment sector:
- Eligible ITC: Businesses can claim ITC on costs like equipment rentals, production services, advertising expenses, and venue fees.
- Restrictions: ITC cannot be claimed on certain expenses like catering, personal use items, or goods and services used for exempted supplies.
Conclusion
The GST regime has streamlined the taxation process for the media and entertainment industry, bringing clarity and uniformity. However, the varied nature of services in this sector necessitates a thorough understanding of GST rates, ITC rules, and compliance requirements. Proper invoicing, regular GST filings, and accurate reporting are key to avoiding penalties and optimizing tax benefits.
For tailored advice and expert assistance on GST compliance, registration, and filing in the media and entertainment sector, contact Team TAXAJ. Our professionals are here to guide you through the complexities of GST and ensure smooth, compliant business operations.
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 |
Frequently Asked Questions (FAQs)
Frequently Asked Questions (FAQs)
1. What is the GST rate for movie tickets?
The GST rate is 12% for tickets priced up to ₹100 and 18% for tickets priced above ₹100.
2. Are digital streaming services subject to GST?
Yes, digital streaming services like Netflix and Amazon Prime are subject to 18% GST on subscription fees.
3. Can media companies claim Input Tax Credit (ITC)?
Yes, media companies can claim ITC on inputs like production costs, equipment rentals, and advertising expenses, provided they meet the eligibility criteria.
4. Is GST applicable on print media advertisements?
Yes, print media advertisements are subject to 5% GST.
For more details or to get assistance with GST compliance, reach out to Team TAXAJ today!
