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At the box office front, the film industry is enjoying a strong run in 2018. However, the sector is still dealing with the spillover effect of goods and services tax (GST) that came into effect last year. While players of the entertainment space saw the unified tax system as a ray of hope, it has increased the tax burden on the industry. Since October 5, movie-goers in Madhya Pradesh have been unable to watch films as theatres have shut shop. This is due to the entertainment tax levied by some local bodies in the state. Taxes in the range of 5-15 percent have been announced, which is in addition to GST. Around 400 theatres have downed their shutters in protest of local body taxes. What are local body taxes? Local body taxes (LBT) are taxes which the state government can direct a city’s local authority to collect. Madhya Pradesh not alone The industry had made known its displeasure on the high 28 percent GST rate. But their disappointment didn’t end there. They were later burdened with dual taxes — something the industry had feared from the beginning. Theatres in Tamil Nadu had shut shop when local body taxes were announced in the state last year. Movie tickets in Tamil Nadu are levied entertainment tax at the rate of 8 percent on Tamil films and 20 percent on other films. This is over and above GST. GST woes In an analysis of 20 states and Union Territories performed by the Multiplex Association of India, 28 percent GST on tickets would have a negative impact in 12 states, neutral in one and positive in 7, a report titled ’Media ecosystems: The walls fall down’ said.
Read more at: http://gstblog.i-tax.in/Single-News/gst-coupled-with-entertainment-tax-is-becoming-a-challenge-for-the-film-industry
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