The Multiplex Association of India (TMAI) in a meeting last week with Satish Chandra, member-secretary, empowered committee of state finance ministers has put forward a case to subsume entertainment tax under goods and services tax (GST) regime.
According to Atul Goel, chairman, TMAI, and managing director e-city ventures, owing to varied tax structure in the states (ranging between 15 to 50%), the development of cinema infrastructure has been distorted and disproportionate across space.
The entertainment tax on Hindi content varies from around 5% in Kerala to 50% in Punjab, MP, Rajasthan and UP. Due to lower entertainment tax in Tamil Nadu (no entertainment tax on Tamil content) and Andhra Pradesh (15% tax on Telugu content), there has been large-scale investment in cinema infrastructure there. The two states account for 41% of total theatres in the country.
TMAI has urged the joint working group on GST to include entertainment tax under GST regime to be ushered in by 2010, which can impose an uniform structure of tax across states to facilitate a common market for cinema infrastructure.