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For theatre owners upgrading their cinemas, the equipment and technology cost is likely to come down as Goods and Services Tax removes double taxation and enables them to avail input credit for equipment.
Sivaraman M, Regional Marketing Manager, Qube Cinema Technologies, that offers technological assistance to cinemas, said cost of equipment like screens, projectors and new technology for upgrading theatres have come down by 15 per cent after GST.
Before GST, apart from excise duty and VAT, they had to pay an additional 14.5 per cent State tax in case of imports. “We can save the 14.5 per cent after GST,” he added.
Currently, most of the equipment related to the industry are placed under 28 per cent tax bracket. Sivaraman said, “We will be able to pass on this benefit to our clients.”
Chaitanya Patil, Director – Commercial, Harkness Screens India, which produces 3D silver screens here, agrees. “Cost of silver screens will come down by 12 per cent after GST,” he said. Earlier, the company had to pay a cumulative of tax of over 28 per cent that includes excise duty, value-added tax and State tax. The cost of silver screen ranged between ₹170 and ₹650 per sq ft. But under single tax system of 28 per cent, Patil said the cost has come down to ₹151 and ₹575 per sq ft.
“With reduction in prices and better acceptance in adopting newer technologies in India, we expect the demand to increase,” he added. The company currently produces around 1,400 screens for domestic market and exports.
A theatre owner, on the request of anonymity, said from technology point of view, GST will be beneficial to exhibitors as the new tax regime enables the owners to claim input tax credit, which they were not able to before.
Await clarificationHowever, industry players agree that it will take sometime before the picture is clear. Sivaraman said the business is yet to pick up as most of the clients are getting GST ready.
This combined with reduction in footfall and no big movie release, is making theatre owners put off their upgrade plans.
Sivaraman said, “All of this affected our business. It fell by 30 per cent this month.” “But it is only short-term and we will be back in business by August,” he added.
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