The GST on food and beverages served at cinema halls will be 5 percent, and not 18 percent, Finance Minister Nirmala Sitharaman said at a press conference on Tuesday after the meeting of the GST Council.

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The Council also has decided to exempt tax on medicines for rare health ailments and cancer drugs. These drugs are decided by centres of excellence to be imported as and when required. A list of such drugs is decided by the Ministry of Health.

There will be also an exemption on certain food items for medical purposes, the finance minister said.

Clarification on GST on food and drinks served in cinema halls

The reduction in tax on food and beverages served in cinema halls comes after the Multiplex Association of India sought the same due to confusion over the matter.

There were reports earlier that some cinema halls were getting notices over GST charged on food and drinks served in cinema halls. Some were charging 5 percent while others were charging higher tax.

Cinema chain PVR was already booking at 5 percent GST on food and beverages and as such there was no impact of this on it, said brokerage firm Nuvama Wealth and Investment.

It said that PVR did not do a provision for this earlier because council had not raised a demand.

PVR Inox's CFO Nitin Sood said the entire cinema industry welcomes the clarification issued by the GST council.

"The clarification will help resolve the industry wide issue for the sector which includes more than 9000 cinemas across the country in avoiding disputes/litigation from GST standpoint, giving tax certainty and help in revival of the theatrical business post pandemic," Sood said.

(With inputs by Shivani Bazaz, Shilpa Ranipeta)

(Edited by : Pradeep John)

First Published:Jul 11, 2023 8:47 PM IST