The recent Goods and Services Tax (GST) cut on movie tickets priced at Rs 100 or less was widely anticipated as a move that would lower ticket prices and bring audiences back to cinemas in droves. However, industry insiders say the relief is likely to remain limited in scope and benefit only a small fraction of the market.
Credits: NDTV
Why the GST Cut Falls Short
On paper, reducing GST from 12% to 5% for tickets priced up to Rs 100 sounds like a win for movie lovers. But in reality, it barely scratches the surface. Sanjay Barjatya, CEO of Roongta Cinemas, explains that this policy primarily impacts single-screen theaters in small towns, not the multiplex chains operating in metros and Tier I cities. In fact, only around 5-10% of multiplex tickets fall into the sub-Rs 100 category, mostly during promotional offers.
With average ticket prices (ATP) exceeding Rs 200 in key markets—Rs 220 in Ghaziabad, Rs 280 in Delhi, and even Rs 259 as an ATP for top multiplex chains like PVR INOX in FY25—the cut does little to shift the needle for the bulk of moviegoers.
Limited Release: Only the Small Players Benefit
Vishek Chauhan, owner of Patna’s Roopbani Cinema, underlines the limited effect of the tax reduction. “Cinemas that operate below Rs 100 are few in number and not frequented by audiences,” he says. The occupancy rates, ticket collections, and footfalls for such screens have always been low. “We are not going to see any big movement,” he adds.
Elara Capital’s Karan Taurani agrees, projecting just a 10-15% growth in footfalls as a result of the new tax structure. But even this is not attributed to ticket pricing alone. “It is content that primarily draws audiences, not marginal ticket price cuts,” Taurani says.
The harsh reality is that many of the cinemas operating below Rs 100 are struggling or “dead” theaters that cannot sustain the economics of modern exhibition. With rising input costs—be it wages, food, or technology—it’s no longer viable to offer air conditioning, laser projection, and ticket prices as low as Rs 50-70.
The Bigger Picture: Calls for a Higher Tax Slab
Exhibitors are united in urging the government to raise the tax-benefit slab to Rs 200 or even Rs 250. “If the Rs 100 slab had been increased to Rs 200, the impact would have been sizable,” says Chauhan. This would not only help struggling single screens but also invigorate the overall cinema ecosystem, especially as footfalls remain 15-20% lower than pre-Covid levels.
Kamal Gianchandani, President of the Multiplex Association of India (MAI), echoed this sentiment, proposing a 5% GST on tickets priced up to Rs 300. “India has a huge headroom to grow to at least 20,000 screens,” he said, noting that tax rationalization could fuel this growth.
Meanwhile, Barjatya pointed out the missed opportunity of reducing the GST on high-value tickets from 18% to 12%. “That would have been a game changer—for investors, audiences, and cinemas alike,” he explained.
Current Measures: More Discounts, But Limited Impact
In the face of stagnant footfalls, many multiplex chains have already ramped up promotional offers. PVR INOX, for example, offers discounted tickets on National Cinema Day (Rs 99 for standard seats) and Senior’s Day (every Monday), along with special packages combining food and beverages.
However, Chauhan suspects that chains may absorb the GST cut without fully passing it to consumers. “Maybe a National Cinema Day ticket will go from Rs 99 to Rs 89, but I doubt chains will pass on the full benefit,” he said.
Credits: Moneycontrol
Conclusion: A Missed Chance for Real Change
The recent GST cut appears more symbolic than transformational. It provides marginal relief for single-screen theaters already struggling to survive, while the vast majority of moviegoers, especially in metro areas, see no change. Industry leaders urge the government to revise the threshold slab upward to better reflect rising costs and consumer expectations.
For now, the blockbuster price drop remains a limited release—far from the blockbuster impact audiences had hoped for.
