The Goods and Services Tax (GST) Council on Tuesday decided to lower the service tax levied on food and beverages in cinema halls to 5 percent from 18 percent. “It is a welcome measure and bound to reduce the rates of food and beverages in AP and Telangana theatres as the GST on a Rs 600 bill would be 5% instead of 18, directly benefiting the cine-goer who likes to savour popcorn, cool drinks and nachos," says Vijayender Reddy, ex-president of Telangana Film Chamber of Commerce and an exhibitor too.“Food items in single theatres have been mostly affordable like around Rs 100, while some multiplexes are charging exorbitant prices and crossed Rs 500 mark per person,” he adds
He claims that 1300-odd theatres in Telangana and Andhra Pradesh are surviving because of canteen contracts more than ticket sales. “More theatres would have shut down, if not for canteen contracts which fetch Rs 75000 to Rs 1.5 lakh per month to each exhibitor, depending upon the areas the theatres are situated in, while remote theaters get lesser. With ticket sales dwindling at counters, single theatres are earning some money through parking contracts, otherwise maintaining a theatre has become very difficult due to rising overhead costs,” he adds.
He further claims that viewers from lower and middle-class families could save some money because crowds in balconies who pay Rs 300 to 400 per ticket, don’t mind spending another Rs1000 or 1500 for food. “Common viewers who largely turn up at theatres are going to save some bucks since the rich aren’t much worried about food prices,” he concludes.
