The 50th meeting of the GST Council, led by Union finance minister Nirmala Sitharaman, took place on Tuesday and resulted in several significant decisions. One such decision was to provide clarity on the tax rate applicable to food served in cinema halls, which was fixed at 5%.
The Multiplex Association of India had requested a reduction in the tax on food services in cinema halls, following reports of theaters receiving notices about the imposition of GST. The GST Council addressed this representation and provided the clarification.
When it comes to movie tickets, those priced above ₹100 are taxed at 12%, while tickets priced below ₹100 are taxed at 18%. However, when theaters offer a combined online package for food and the film, the GST will be calculated on the total amount and taxed at 18%.
On the other hand, if customers purchase food separately from the movie ticket at the cinema hall, a 5% GST will be applicable. To avoid the higher GST rate, industry experts advise customers not to pre-book their snacks.
Furthermore, food and beverage (F&B) expenses alone account for approximately 52% of a film’s ticket price, according to Nitin Sood, CFO of PVR Inox. He mentioned that there is room for this percentage to be higher, as seen in Western countries where it can reach 70-75%. The aim is to increase overall F&B consumption at cinemas in the coming years.
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