Minister of Information and Broadcasting P R Dasmunsi, who will be meeting the information ministers from all states in New Delhi on Wednesday, will try to convince them that entertainment tax on the films should be minimised for an unstunted growth in Indian cinema, ministry sources said.
Depending on the location of theatre in the states, the movie-goers pay anywhere between 40 to 100 per cent tax on a ticket, making India a "highest entertainment taxed" country in the world.
This is in contrast with other industries where excise duty is capped at 16 per cent and service tax at 15
per cent. Average entertainment tax rates in the neighbourhood are between 10 and 15 per cent.
As entertainment tax is the state subject under the Constitution, every state has its own tax regime. The film industry has often complained of multiplicity, unrationalised and obsolete tax structure, which has been subject to the whims of each state government.
Besides a hefty entertainment tax, which nearly doubles the cost of the ticket, the film industry also coughs up 12.5 sales tax or VAT (value added tax) on the eatables and drinks sold in the intermission, 12.36 service tax on the advertising revenues, 12.5 VAT on the distributor payouts and 12.36 service tax on the property rentals.
