The recent decision by the Goods and Services Tax (GST) Council to reduce the service tax on food and beverages in cinema halls from 18 percent to 5 percent has been widely welcomed. This move will directly benefit cine-goers in Andhra Pradesh and Telangana, as the lower tax rate will lead to reduced prices for food and beverages. Vijayender Reddy, former president of the Telangana Film Chamber of Commerce and an exhibitor, views this as a positive step that will particularly benefit those who enjoy popcorn, cool drinks, and nachos while watching movies.
Reddy highlights that while food items in single-screen theatres are generally affordable, some multiplexes charge exorbitant prices that can exceed Rs 500 per person. He explains that canteen contracts play a significant role in sustaining the approximately 1,300 theatres in Telangana and Andhra Pradesh. These contracts provide exhibitors with monthly earnings ranging from Rs 75,000 to Rs 1.5 lakh, varying based on the location of the theatres. Reddy further notes that maintaining a theatre has become challenging due to rising overhead costs, and ticket sales alone are not sufficient to sustain them. To compensate for dwindling ticket sales, single-screen theatres also generate income through parking contracts.
Reddy emphasizes that the reduction in food and beverage taxes will primarily benefit viewers from lower and middle-class families. Balcony crowds, who typically pay Rs 300 to 400 per ticket, tend to spend around Rs 1,000 to 1,500 on food during their cinema experience. Consequently, common viewers are likely to save money on their overall cinema expenses, as the wealthy audience members are less concerned about food prices. In conclusion, the lower tax rates on food and beverages in cinema halls are expected to provide financial relief for cinema-goers from various economic backgrounds.
