Movie lovers rejoice! Come July 25, and shelling out exorbitant amounts for your favourite popcorn and samosa will be a thing of the past. The recent decision by the GST Council to reduce tax on food and drinks consumed at movie theatres from 18 per cent to 5 per cent is set to make your cinema snacking experience that much more affordable now.
The GST Council, headed by the Union Finance Minister and comprising representatives from all states and UTs, reached a consensus on this favourable move during its 50th meeting on July 11, 2023. The move is likely to provide a much-needed boost to the struggling theatre industry in the post-Covid era.
Food and drinks play a vital role in the revenue stream of the cinema exhibition sector, particularly for multiplexes, where they contribute up to 35 per cent of total earnings. Nitin Sood, CFO of PVR INOX Ltd, expressed his appreciation for the clarification issued by the GST Council, stating that the entire cinema industry welcomes the decision to subject food and beverages sold at cinemas to a 5 per cent GST rate. This development aims to resolve industry-wide issues and prevent any disputes or litigation related to GST, offering tax certainty and aiding in the revival of the theatre business after the pandemic.
Snacks like popcorn, nachos, candy, and soda have historically been priced much higher within the confines of a movie theatre compared to regular snack bars or grocery stores. Moreover, premium cinemas that provide luxurious amenities like reclining seats and dine-in options often charge even higher for food and beverages.
To mitigate expenses, many people opt to eat before or after the movie, missing out on the traditional cinema snacking experience. However, with the upcoming reduction in GST, coupled with the lower overall prices at cinemas, patrons can now indulge in their favourite treats without breaking the bank.
So, mark your calendars and get ready to savour your popcorn and samosa at the movies, as they will now be a lot more pocket-friendly. With the dip in taxes, your trip to the cinema will not only be a visual satiation but also a gastronomic fulfilment.