The GST Council, headed by means of Union finance minister Nirmala Sitharaman, held its fiftieth assembly on Tuesday, and got here up with a number of key choices. One such resolution was once a explanation in regards to the tax on meals served in cinema hallswhich it stated, was once fastened at 5%.
According to CNBCTV18, the Multiplex Association of India had appealed for a discount within the tax on meals services and products in cinema halls. Their illustration to the GST Council got here after confusion arose because of stories of theaters receiving ‘notices’ in regards to the GST being imposed by means of them, the file stated.
What does ‘5% tax’ imply?
At provide, film tickets priced above 100 are taxed at 12%, and the ones above 100, at 18%. Therefore, when theaters be offering moviegoers a web based combo choice of the meals and the movie, the GST might be at the general quantity, and can, due to this fact, be taxed at 18%.
The 5% GST, however, is acceptable when the meals is introduced one by one from the film price ticket, on the cinema corridor itself. To keep away from the upper GST, due to this fact, trade professionals advise consumers to not pre-book their snacks.
‘Food and drinks account for nearly part of the price ticket value’
According to Nitin Sood, CFO, PVR Inox, the meals and beverage (F&B) by myself accounts for nearly as much as 52% of a movie’s price ticket value.
“Cinema moderate F&B spend these days is roughly 50-52% of moderate spending on a price ticket by means of a client. And there’s no explanation why this quantity must no longer be upper. In the Western nations, we’ve noticed this ratio as prime as 70-75% as neatly. And, this is our purpose that over the following few years, to extend the entire F&B intake at cinemas,” Sood told CNBC TV18.