City anchor: Govt flexes tax muscle to keep multiplex ticket rates in check

The state cabinet on Wednesday passed the revenue department's proposal to increase entertainment tax for multiplex owners who charge more than Rs 250 per ticket. The decision, which is likely to add to state coffers, was taken to discourage multiplexes from increasing ticket prices on weekends, festive periods and when screening blockbusters.

The cabinet also decided to completely waive entertainment tax for all single-screen theatres in municipal councils for five years and for seven years in rural areas. There are 549 single-screen theatres in the state, of which 80-100 are in rural areas. Single-screen theatre owners across Maharashtra have been opposing 45-per cent entertainment tax on ticket sales, arguing that they suffer losses due to low ticket rates. The cabinet also decided that theatre owners screening Marathi films at prime time will be allowed to levy additional service tax of Rs 2 per ticket.

As per the new slab, for tickets up to Rs 250, there will be no additional tax other than the existing 45 per cent. For tickets costing Rs 251-350, government will charge 49.5 per cent entertainment tax. For tickets priced at Rs 351-500, the new tax will be 51.75 per cent, while tickets costing Rs 500 and above will attract 54 per cent tax.

Maharashtra has 64 multiplexes. State is expected to get additional revenue of Rs 30 crore in its coffers.

In addition to tax exemption, the state will also direct single-screen owners to improve services and use digital technology to raise the standard of entertainment provided.

Multiplex owners, meanwhile, have expressed displeasure over the move.

Manoj Desai, executive director, Gaeity Galaxy and Maratha Mandir, said, "It will be a huge blow to multiplexes. Now, we will have to think many times before deciding to screen a film. That, in turn, will be harmful to producers and films. Most of the movie-goers are in the cities. The decision will benefit only a handful in rural areas. The decision is unfair."

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