The management of Prasads has stated that the multiplex has not been fined by the GST anti-profiteering wing for not passing on the benefit of GST reduction to movie-goers. Mr Ramesh Prasad, chairman and managing director, Prasads, responding to a report in these columns on February 9, explained the problems that theatres were facing. “After the GST rate on cinemas was reduced from 28 per cent to 18, GST officials visited our office and inquired whether or not we had reduced the price in line with the anti-profiteering provision of the GST law.”
“We explained to them that the admission rates to cinemas are controlled by the state government. The pre-GST rate of entertainment tax was 15 per cent for Telugu movies and 20 per cent for other language movies. The average rate used to work out to around 17 per cent,” Mr Prasad said. “With the implementation of the GST, the rate on cinema tickets went up to 28 per cent. Theatres were not allowed by the state government to increase the ticket price in line with the increased rate of tax,” Mr Prasad said. All theatres absorbed this increased tax for 18 months.
After the GST rates were revised, the government did not reduce admission rates. The present rate of 18 per cent was almost the same as 17 per cent earlier and there was no profit, Mr Prasad said. “It only reduced the additional tax burden on us and hence no reduction in rate of admission is warranted.” Mr Prasad said that considering this explanation, the GST authorities had sought the details which were provided to the GST principal commissioner on February 4. Prasads also reduced the ticket price in line with the reduction effected by some other multiplexes and requested him to confirm that the multiplex had made no profit.