'Decision to place 28% GST rate on cinema halls discouraging'

New Delhi: The government's decision to put cinema exhibition industry in the highest tax slab of 28 per cent under GST regime along with luxury items will affect quality of contents and growth of multiplex industry, said PVR Chairman and MD Ajay Bijli.

Terming the decision as "unfortunate" and "discouraging" Bijli said that he was expecting a lesser tax slab for the industry of around 12 per cent or 18 per cent and will make representation before the authorities to lower it.

"We are clubbed with the highest category, which the government wants to discourage like luxury goods and casinos etc. Cinema is the basic form of entertainment for masses of this country," Bijli told PTI.

He said the multiplex industry has been asking the government for 12 per cent or in the worst case scenario 18 per cent rate under GST.

"Raising it to 28 per cent is extremely discouraging," Bijli added.

According to him, tax slabs on the cinema exhibition industry in several countries as the US, China are in single digits only. This not only helps the industry to create world class content but also better infrastructure.

"As they are not taxed heavily, they plough back whatever cash they generate to create better infrastructure," he added.

The industry players will be taking up the issue with concerned authorities and seek reclassification from 28 per cent to 18 per cent, Bijli added.

"In the long run the tax collection would only have been improved because this would have encouraged us (the whole industry) to open more screens and also improve the quality of the content. Overall, the benefit would have accrued to the government," he said.

According to reports India has 13,900 single screens and over 2,050 multi-screen in 2016.