How GST Affects The Media And Entertainment Industry

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How GST Affects The Media And Entertainment Industry

GST Background

What do we know about GST? The Goods and Services Tax (GST) is an indirect tax, pertinent all throughout India. It has taken the place of numerous cascading taxes charged by the state and central governments.

Entertainment and Media Industry Growth

As we know, the entertainment and the media industry in India is one of the most prospering and booming economies in the country. It has seen a huge increase in the last few years and its going to continue to do great by the looks of it. If we talk about the box office, then its revenue is all set to rise to 18,047 Cr in 2021. Entertainment is extremely vital in our lives. After a hard day’s work, we want to relax and watch a good TV show or an interesting movie. So its not surprising the industry revenue is one of the richest in the country. Keeping this in mind, have you wondered how GST impacted the media and entertainment industry?

Pre-GST Era

Let’s look at the pre-GST era. Earlier, services such as broadcasting, Direct-To-Home (DTH) and so forth was levied with entertainment tax. Its rate used to differ state by state. Gujarat was charged with 20% of entertainment tax while Bihar was taxed 50%. When it comes to Maharshtra, it was 45% (nil for marathi films) while Tamil Nadu was 15% (nil for tamil movies). So yes, the entertainment tax varied state wise. In the pre-GST period, the service tax was 15% and the entertainment industry only had to pay 60% of the 15% service tax. Under the VAT regime, the total tax was between 14%/23.5%.

Impact of GST

Cinemas end up with over 28% GST which has ultimately lead to significant increase in the ticket prices for movie buffs and is extremely taxing for the film industry that is already battling piracy. Even if the movie ticket is less than 100 rupees (which is extremely rare), there is still a surge of over 10% in regards to tax liability which will eventually be borne by the end consumer. The states that had a high entertainment tax benefit from GST. Since the local entertainment tax rate in these states is done away, the 28% GSR rate is beneficial as these states anyway had a rate of around 38%-40% to an average. But on the other hand, it has a horrible effect on cinema goers in states like Gujarat, Andhra Pradesh, Punjab and so on where the rates were lower before.

Tally has come up with a new cutting-edge mobile app known as Tally GST. Its job is to make the tax system easy for many businesses. For more than two decades, Antraweb Technologies has been a Tally Partner. It delivers full Tally services to its clients globally.

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