The 50th meeting of the GST Council concluded on Tuesday with the goods and services tax rate trimmed down to 5% for four items.
A big relief for food lovers who visit multiplexes to relish cinema regularly is that the GST Council made the decision to lower the GST rate from 18% to 5% for food served in cinema halls.
Multiplex operators have applauded the GST Council’s decision to lower the tax rates on food and beverages sold in movie theaters. The move is seen as a positive step towards the revival of the theater business post-Covid.
Previously, food and beverages accounted for a significant portion of earnings for the cinema exhibition industry, particularly for multiplexes, which generated up to 35% of their revenues from this segment. The clarification by the GST Council that food and beverages sold in cinemas fall under the category of ‘restaurant service’ and will be subject to a 5% GST rate has been met with appreciation.
This clarification is expected to resolve industry-wide issues and provide tax certainty, supporting the revival of the theater business in the post-pandemic period. Prior to the pandemic, India had over 9,000 cinema screens, but financial challenges and prolonged operational restrictions led to some closures in the industry.
