Entertainment plays a big part in our lives. After the hectic 14-16-hour work schedule, the first thing that comes to mind is relaxation through movies or something similar like the entertainment center. It acts like the sunrise for the economy and is also making high tides. But the recent GST on the entertainment center has affected everyone from poor to rich. It had high growth in the upper sector and created an uneven market in the industry. The Entertainment Industry had few issues before the implications on GST registration. There is both positive and negative side. Let’s discuss in detail about its impact.
GST registration – Under the VAT Regime
Earlier the entertainment tax was based on the laws of the state. There was no set of taxes and hence the levies were increased. The burden had to bear the burden by the heavy charges. Then the Entertainment Tax was imposed by the states and it ranged from 0 to 110% and the average rounds up to 30%. Each state has different Entertainment Tax with the highest being the Jharkhand with 10% and the lowest being the Rajasthan, J&K, and Himachal with 0%. Because of this, everyone has a fair share of the pie.
Dual Tax Elimination while GST registration
The GST had another advantage. The dual tax of the VAT and Service Tax was eliminated and it relieved most of them.
GST registration For End Customers
The impact of GST on end customers has affected in high terms. Let’s take the movie halls as an example. The movie halls, multiplexes, beverages, and food are taxed at 20% and 30% is imposed on the tickets. One will notice that each state has different ticket price depending on the tax.
The GST on movie ticket is 28%. The food and beverage at the entertainment center attract another 18%. Hence, one will see that they are much lower than the Service Tax and VAT.
The GST has a mixed reaction on the Entertainment Centre and it varies according to different states. The state that enjoys the high GST on the entertainment has benefitted because the end customers have experienced a reduction in price. But it also had a drastic effect on the states with low entertainment tax.
GST registration facts for Entertainment Industry Owners
The owners of Entertainment Industry have also been affected by the implications of GST. They are experiencing both positive and negative impacts depending on the business of the state.
Availability of ITC
ITC now falls on the service components activities like the renting of place for the movie halls, catering, security cost which was not included in the pre-GST regime. So, the GST paid for renting the place and other such things can be adjusted through selling tickets which has increased with the GST.
From this, we learn that the burden on the entertainment owners will be reduced in the upcoming days.
Additional Tax apart from GST registration
The municipal bodies have not got any piece of share from the entertainment tax collected by the states. But there are reports that some states may be charged extra for the entertainment tax. If the local bodies get involved in the tax game, then it may again affect the whole system of Tax Implication.Herr – you Check Out about how to correct errors in GST registration.
The GST on the Entertainment Tax has seen both the positive and the negative effect and it also depends highly on different states. The owners of entertainment centers gain under the tax regime but the commoners must spend a little extra from their pocket to relax and get entertained.
Disadvantages of GST registration
It started out with multiple registrations like the GST Registration and many other such registrations. It had to be registered even it was of the same company. It will have to be paid by the registered person having the goods and services. It created procedural issues. It also had a high tax issue on the entertainment and the amusement parks. It affected many as they saw a high price rise.
The state exempted the tax on the regional films to spread a positive message and to lessen the burden on tax on the entertainment industry.
The GST proved a boon for many but at the same time hard for many others. The industry people have benefitted but the low liners have also been affected.