Hyderabad: Mahesh Babu’s multiplex faces GST heat, told to pay up Rs 35 lakh

HYDERABAD: In another case of theatres not passing on the benefits of the goods and services tax (GST) to moviegoers as per the Union government’s directives, GST Rangareddy anti-evasion teams have found out that AMB Cinemas in Gachibowli had pocketed Rs 35 lakh in January 2019 while violating the anti-profiteering clause in the CGST Act.
The theatre which is operated by Asian Cinemas and owned by actor G Mahesh Babu on its part said that the amount of Rs 35 lakh is an “inflated” figure and that they had not received any notice from GST officials.The theatre also said that they have obtained a fresh court order that had fixed ticket price and would be effective from February 22.
Meanwhile, the GST Rangareddy Commissionerate has forwarded the details of the profiteering case to the state screening committee of the GST anti-profiteering wing. “GST on movie tickets was reduced by Centre with effect from January 1, 2019. AMB Cinemas did not reduce the ticket price despite GST on movie tickets brought down from 28% to 18% on tickets priced Rs 100 and above. Upon inspection by GST Hyderabad officials, it was found that many theatres had not reduced the price,” said a source from the GST Commissionerate.
“AMB Cinemas reduced the prices after almost a month (since Centre’s notification) in February. The undue profit they have accrued by pocketing a differential amount from moviegoers in January has to be paid back to the consumer welfare fund. Companies like Nestle Products have paid such amounts back to the welfare fund after they were found to have profited around Rs 100 crore despite the reduction in GST,” the source added. GST officials have said that action will be taken should AMB Cinemas fail to deposit the Rs 35 lakh to the consumer welfare fund.
Responding on the matter, a top functionary from Asian Cinemas said: “There was no notice served to AMB Cinemas. The figure of Rs 35 lakh is inflated, the actual figure would be around Rs 20 to 25 lakh. However, immediately after we came to know that PVR Cinemas had reduced their ticket prices, we too did the same from Rs 200 to Rs 185 at the end of January.”
“We have a fresh order from the Telangana High Court which has fixed the Rs 170 with an additional Rs 30 as GST, which makes a total of Rs 200. We will be implementing the order from February 22 which means the price will come back to Rs 200,” the functionary said on condition of anonymity.
The state government has not issued any order on fixing the prices of tickets for theatres due to which theatre managements are approaching the high court to get the price fixed. In case of theatres where a court order did not mention that the price included GST, the theatres have reduced total ticket price after a warning from GST officials. But in case of court orders stating that the price fixed by the court is including GST, the theatres have not reduced the ticket price.