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MUMBAI:
The multiplex owners in India are looking forward to uniformity
of entertainment tax in the union budget 2008-09. The other
things they are insisting on are decrease in service tax on
lease rentals.
"The
rates of entertainment tax are amongst the highest in the
world. Most states levy an entertainment tax ranging from
30 to 50 per cent of ticket sales. The average rate of entertainment
tax across the world is around 10 per cent of ticket sales,"
said E City Ventures (Fun Republic) MD Atul Goel.
Multiplex
owners are awaiting abatement of 67 per cent for service tax
on rent so that effective tax rate reduces to 4 per cent.
They
feel as the high rate of entertainment tax still exists, the
domestic cinema exhibition industry also pays sales tax on
food and beverage. Multiplex owners say that they are forced
to pay multiple taxes which include property tax on real estate
that it occupies, service tax on advertising revenues, show
tax on the number of shows held and income tax on net profits.
Cinemax
India CFO Jitendra Mehta says, "We await abatement of
67 per cent for service tax on rent so that effective tax
rate reduces to 4 per cent."
Echoing
Mehta, Goel adds that the service tax introduced on lease
rentals for cinema exhibitions will virtually kill this industry,
and, in turn, the entire film industry. He thinks that the
entertainment tax structure needs to be re-looked to benefit
the overall cinema infrastructure.
Multiplex
owners are demanding a one indirect tax regime. They insist
that indirect taxation of goods and services should be integrated
into the Goods and Service Tax (GST). Besides entertainment
tax on cinema tickets should be integrated into GST.
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