Film and Television Producers Guild urge government for lower GST rate on film industry

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The Film and Television Producers Guild of India (FTPGI) is rallying for a lower Goods and Services Tax (GST) rate of 5 per cent to make the film industry more lucrative in terms of investment in infrastructure and technology.

Talking about the importance of the issue, Siddarth Roy Kapur, President of FTPGI, said here, “A rate of 5 per cent GST on film tickets and copyright transfers will be in keeping with global taxation norms for the film sector and will go a long way in ensuring the long-term health of the industry.

“Due care should also be taken to ensure that the film industry does not suffer from an inverted duty structure as is the case under the current service tax legislation,” said Kapur.

Considering the fact that many single screen cinemas are shutting down due to dipping footfalls, and lack of investment is affecting the growth of the Indian film industry, Kulmeet Makkar, CEO of the Guild said, “We would like to urge the government to consider the film industry as a revenue-generating industry that not only provides entertainment but employment to many sectors. In addition, as an industry, we can grow only if we can earn more. So, a lower rate of 5 per cent GST will attract more investors to come and invest in the cinema industry that will help it to grow and generate more revenue.”

Citing the example of the highest grosser of Indian cinema so far, Dangal, Makkar said, “Dangal is one of the highest grossing films of 2016 which earned a box office revenue of over Rs 385 crore whereas only 4 per cent of the population went to watch the film in the theatre. Now, imagine how much, as a film industry, we can earn if that percentage will go higher?”

Knowing the fact that a majority of the population of our country is the youth who prefer to watch films online rather than going to theatres, isn’t the dip in footfall an obvious consequence?

Emphasizing on the experiential side of movie watching, Kapur said: “Given the accessibility, the audience always want to have a theatrical experience. If we look abroad, where people have the best access to digital media, cinema survived there as well. Such a question arose even when television and DVD were introduced in India. Nevertheless, cinema always survived. However, the tax imposed on the industry is so much that it has crippled the growth of the industry in many ways.”

Asked about the potential of film industry in revenue generation and why entertainment industry has not been taken seriously by the government, Kapur said: “I don’t think in India, the film industry has been taken seriously in the past, but what we are trying to communicate is the potential of film to sell the story of our country to the world.

We can generate revenue in tourism and other sectors by celebrating the beauty, culture of India through films, which can make India a destination for investors.”

Kapur is hopeful. “Our government is looking for avenues to bring the world to India and India to the world. Therefore, I believe that they will use local film industry as a soft power to take India to the global arena.

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