Film business sees little relief; Some spot an upside

The reduction of goods and services tax (GST) on film tickets priced up to ₹100 to 5% from 12%, with effect from September 22, will provide limited tangible relief for both audiences and the exhibition industry, said producers, distributors and exhibitors, who have been struggling with dwindling footfall and intensifying competition from cheaper entertainment alternatives.

Recently, the Multiplex Association of India had appealed to the government to consider film tickets priced up to ₹300 under the 5% tax slab to not only make ticket prices affordable to audiences but also boost the business of theatre owners across the country.

The new GST does not address these issues, according to them.

According to distributors and industry veterans, filmgoers will not gain much from the lowered GST.


"Any relief from the government is welcome. But I think it would have been materially better if the government had levied 5% GST on ticket prices up to ₹200. This is because 90% of the business in the industry is in this range only. This shows that the government is focusing on lower mass cinemas," said Yusuf Shaikh, CEO and founder, Janta Cinema, an exhibitor that showcases films at affordable prices.

Under the new GST regime, tickets above ₹100 will continue to attract 18% tax. In 2024, the average ticket price of India's exhibition industry across languages industry was ₹134, above the threshold for lower GST. For Hindi-language films, the average ticket price last year was much higher, at ₹203.

At the other end of the spectrum, veteran producers said the new GST regime is likely to bring incremental revenue to the stakeholders of the exhibition industry.

"The new GST is a structural relief to the exhibition industry," said Suniel Wadhwa, co-founder and director, Karmic Films. "Even if only 10% of tickets fall under the sub-₹100 bracket, the cumulative effect across India can run into several crores annually. This will especially support single-screen theatres in smaller towns."

According to industry estimates, there are more than 9,900 screens in India, of which 55-57% are single screens. According to Wadhwa, who is also a veteran film distributor, if exhibitors sell 10 million tickets in a year, then the industry gains nearly ₹70 lakh as additional revenue.

In 2024, according to Ormax Media research, exhibitors sold 883 million tickets.

A section of producers exuded optimism that the overall reduction in GST across sectors and different categories in consumer segments may prove to be a trigger for spending on cinema tickets. "I think the bigger trigger is the overall reduction in GST in the consumer space. This will put money in consumers' hands, which in turn may encourage consumer discretionary spending," said Naveen Chandra, founder and CEO of 91 Film Studios.