Waiving E-tax, revision of GST rates: The entertainment industry has a huge expectation from budget 2021

Union Finance Minister Nirmala Sitharaman is going to present her third budget on February 1, and the entertainment industry is looking at her with big hopes for the industry that has faced a lot in the year 2020 because of pandemic and simultaneous lockdown.

According to Statista, the value of the film industry in India in the financial year 2020 was about 198 billion Indian rupees. However, the pandemic has made the industry suffer a lot because of the closing of theaters, film sets going on indefinite delays, and halls, stadiums, and other event centers staying under lock and key.

Kailash Gupta, Chief Financial Officer – INOX Leisure Ltd, told Opoyi that “considering the fact the film Industry on a whole has suffered immensely due to the lockdown, and cinema exhibition sector will play a pivotal role in driving back the buoyancy, we hope that the Government considers a downward revision of GST rates in the Union Budget.”

“Additionally, speedier tax refunds, interest-free loans to prevent defaults and waiver in minimum demand charges on electricity would relieve the industry from the huge stress. Reimbursement of wages for contractual workers and subsidies on salaries paid to the employees for the period of lockdown should also be considered as a relief measure by the Central and State Governments.

“At the ground level, a waiver on license fees and various local taxes like LBET, Property Tax and Show Taxes for 2 years from the date of resumption of operations would provide further relief and much-needed revival impetus to the industry,” he further said.

Given the enticing lineup of content that we are looking at in CY21 (Calendar Year 21), critical Government relief would help us attract more crowds to cinemas, who are entertainment-starved and are looking for an entertaining ‘escape’ from the upheaval caused due to the lockdown, says Gupta.

“Increased footfall would further churn the entire economic ecosystem of the film industry and would fetch more revenues and taxes for the exchequer. We also hope that electricity rates are given a look in by the government and be considered for rationalization. Any reduction in costs would bring about a great deal of relief for the sector.

“We shall also keenly wait for the relaxation of the COVID guidelines on seating from 50 percent to 100 percent and on F&B, which would hasten our revival process,” he told Opoyi.

While there were very few films released in first few months of 2020, the approach many players in those sectors have taken is to begin to push their focus toward streaming and releasing their movies on OTT platforms, which for some was not so beneficial business-wise.

Kamal Gianchandani, CEO of PVR Pictures Ltd, echoes the fact that the film entertainment sector is severely hit by Covid-19.

“We have requested the government to consider waiving off the GST on cinemas for a minimum of 1 year to facilitate a quick recovery of the sector,” he told Opoyi.

Same is with Pawan Chawla, Director P&M Movies Pvt Ltd.

“Entertainment Industry is already in a mess due to the Covid 19 and various Lock downs. Since the industry is not doing much well after so many unlock stages also want the taxes to be completely waived off. And one thing that I would like to stress upon is that the government should also promote that you can step out now with all necessary precautions and measures in place and remove the cap of 50 person,100 person etc,” he said.

Nitin Arora, Managing Director of Katalyst Entertainment, a luxury company who does celebrity coordination, since public shows are not happening at all and people are not willing to come out as far as films are a concern, “government should support this industry and there should be some relief in terms of taxes which are imposed on our industry.”

“And I hope things will work out in the favour of the entertainment industry,” he told Opoyi.