Oct 01, 2026 5:30pm IST
Film Industry Raises Concerns over 567% Entertainment Tax Hike Proposed by BMC
The Brihanmumbai Municipal Corporation (BMC) has proposed an increase in entertainment tax rates, which would amount to a 567% hike for air-conditioned halls and 345% for non-air-conditioned venues. As per the proposal, the entertainment tax, set in 1969, has not been revised since.
The entertainment tax on air-conditioned cinema halls and multiplexes would increase from ₹60 to ₹400 per ticket, while the tax for non-air-conditioned venues would rise from ₹45 to ₹200. For performing arts events, including plays and live concerts, the tax would increase from ₹50 to ₹100. The civic body’s proposal also stated that, to promote regional industry and culture, cinema halls, multiplexes and theatres screening Marathi and Gujarati films, as well as hosting plays and concerts, would be eligible for a 100% tax exemption.
Diksha Karkar, chairperson of the civic body’s law committee, has urged the administration to rework the proposal. Suresh Shyamlal Gupta, President, All Indian Cine Workers Association (AICWA), met Prashant Gaikwad, Deputy Municipal Commissioner (Municipal Commissioner Office), to express concerns over the severe impact the proposed tax could have on filmmakers, distributors and audiences.
Related Stories
Variety India spoke to exhibitors, distributors and producers for their views on the proposed hike. Vishek Chauhan, CEO of Roopbani Cinema in Bihar, says, “India has one screen per 1.5 lakh population as opposed to the United States’ one screen per 8,000 people. We are a heavily underscreened market and if the government imposes higher taxes, that makes it tougher for movie theaters to operate. The top movie chains in India are not making money, including PVR, which barely breaks even in some quarters.”
Pointing out that the Indian film industry is a ₹13,000 crore business, he adds that the move could discourage investors from investing in the sector. He wonders whether it could have an impact on other municipalities in the coming days. “Delhi can take a cue from this, even Kolkata. It has a domino effect,” he says. He adds that such actions could put pressure on those looking to expand.
Chauhan believes consumers will ultimately bear the cost. “The hike will be passed on to the consumers. So movie-going will become expensive. That’s a no-brainer; frequencies will drop and sales will be impacted.”
Popular on Variety
Raj Bansal, a multiplex owner and film distributor from Jaipur, says, “The state government should not have the jurisdiction to increase the taxes on films. It should be by the central government. This proposed hike will be a big burden for the entire film world. We are already suffering because of OTT and have to use the BOGO (buy one, get one) model for most of the mid-budget films.” He hopes the film fraternity will unite to engage in dialogue with the concerned officials and persuade them not to implement the order.
Akkshay Rathie, Director, Aashirwad Theaters Pvt Ltd and a prominent film exhibitor, understands that the rates will not be levied per ticket, but will be levied per show, based on the proposal. He suggests that both sides engage in a meaningful conversation. He adds, “Cinemas and entertainment as a sector has been under pressure for a fair bit of time. Less than 10% of movies make a positive return on investment. And an additional levy on a sector like this is only pushing it towards its coffin.”
Actor-producer Nikhil Dwivedi says, “We are already one of the highly-taxed industries. It is the need of the hour to relax those taxes instead of increasing them.” He also supports the proposed exemption for Marathi and Gujarati cinema. “That's a good thing. Regional art should thrive, including cinema.”
Producer Ramesh Taurani explains that the hike is still at the proposal stage. He adds that where an establishment was earlier expected to pay ₹1,500, it would now have to pay ₹10,000, with the additional cost expected to be absorbed by distributors and exhibitors. “It will not affect the footfalls and ticketing price. This is a BMC tax per show on the cinema.” He says that he has opposed the proposal and that discussions are ongoing to find a solution.
Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.