Budget 2018: With Arun Jaitley slated to present the Union Budget 2018 on February 1, 2018, the media and entertainment sector is hopeful that the Finance Minister will provide some relief under the new GST regime. FICCI’s pre-budget 2018 memorandum states that many state governments like Maharashtra, West Bengal, Orissa, Rajasthan had announced entertainment duty exemption schemes for new facilities. These schemes were also for those who renovate and install latest equipment like projection, sound system etc. “The tax exemptions have been granted from 5 to 7 years and many of them are under the grant period. If this tax exemption is removed then the exhibitors who have invested huge amount for renovation by borrowing loans from financial institutions may not be able to repay the loans and also to recover their cost,” FICCI notes.
FICCI’s pre-Budget 2018 memorandum, therefore, recommends that cinema owners be “allowed refund in a proper time frame under the GST regime in respect of the exemption committed under the erstwhile regime.” “Additionally, the commitment made by Government prior to GST regime, should be honoured on the priority. The refund granted should be based on the original commitment by extending the tenure of the expired period and not be limited to the SGST portion only,” FICCI adds.
Very importantly, FICCI notes in the pre-Budget 2018 memorandum: “For the modernisation and maintenance of the cinemas the State Governments have permitted the cinema exhibitors to retain part amount of the admission rates as Service Charge and no entertainment duty is charged on this retention. If this is removed no cinema will be able to survive. This is a very big relief to especially the Single Screen Exhibition trade to maintain and upkeep their cinemas and compete with Multiplexes. It is requested that these important exemptions/service charges in the state entertainment regime be further continued in the GST regime also.”
According to FICCI, the levy of local body entertainment tax defeats the basic purpose of implementing GST. “Various states like Tamil Nadu, Gujarat, Rajasthan, Maharashtra, Haryana and Chandigarh have already authorised their local bodies to levy entertainment tax on entertainment including Cinema Exhibition and many other states are contemplating doing so. Tamil Nadu 76 has already implemented LBET @ 8% on Tamil Movies, 15% on Hindi Movies and 20% on English Movies,” FICCI states. “In addition, imposition of such a levy would entail compliance and enforcement challenges. It is accordingly suggested that this local body tax be subsumed in SGST and suitable allocation to the local body be made to compensate them for their shortfall, if any,” it adds.