IMPPA Urges Finance Minister Nirmala Sitharaman to Abolish GST Levied on the Film Industry

The Indian Motion Picture Producers' Association (IMPPA) on Wednesday wrote a letter to Union Finance Minister Nirmala Sitharaman, requesting her to abolish the Goods and Services Tax levied on the film industry. Signed by IMPPA President TP Aggarwal, the letter reads, "Requesting you to kindly consider the pain and agony the Film Industry is going through due to extreme taxation and also GST being levied at 18 per cent which is at a very high rate because this is an industry where Government makes no investment at all but takes away the lion's share in the income generated and therefore in such an industry where the entire capital is being contributed by the entrepreneurs.  Nirmala Sitharaman Inaugurates Development Works of Around Rs 165 Cr in J-K' Srinagar.

And today at a stage where the industry has reached a dead end due to the pandemic it has become very important and necessary that new blood & strength be pumped into the industry by way of abolishing GST and all other taxes as a onetime measure to revive the industry." The association urged the government to take necessary steps immediately. Nirmala Sitharaman Makes Important Announcements on Income Tax Return Filing Deadlines, GST And More Amid Coronavirus Outbreak: Check Full List of Announcements.

"..Because we have to keep in mind that the Government has given massive tax exemption and subsidy to numerous multiplexes and exhibition outlets which are starved of content and without regular flow of films they will have to close down as it is a business which solely runs on the income generated by sale of tickets which tickets also gets sold only if the film appeals to the public enough to inspire them to pay money and buy tickets and therefore if the industry is to survive it needs films and the Government should immediately take necessary steps to abolish or substantially reduce GST on the M&E Industry," IMPPA stated.

"We are very happy to note that your kind self has declared uniformal 12 per cent GST rate on MMF, Yarn, fabrics from January 1, 2022, instead of 18 per cent, 12 per cent and 5 per cent prevailing presently which is exactly what we have been appealing to you to save the film Industry from extreme taxation and GST which is levied at 18 per cent but at time of sale GST recovery is only 12 per cent.

Thereby making the taxation of inputs at higher rates than finished products creating build-up of credits and cascading costs leading to accumulation of taxes at various stages of the M&E value chain and blockage of crucial working capital for the industry which industry is already in severe trouble due to total lockdown of production as well as exhibition which has led to severe job losses and financial losses," the letter concluded. Cinema halls first shut in March 2020, were allowed to reopen in December, and then shut again over fears of a second wave of coronavirus.

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