The Brihanmumbai Municipal Corporation (BMC) has proposed a substantial increase in the entertainment levies on Mumbai's movie halls, theatre venues, and live performance spaces. The revised rates are yet to take effect and require approval from the Maharashtra government's Urban Development Department (UDD) is projecting a modest increase of Rs 5 to Rs 10 in average ticket prices.
Under the proposal, the tax levied on air-conditioned cinemas or theatre, performing arts venues and live entertainment programmes in Mumbai. and multiplexes would increase from Rs 60 to Rs 400 per show. This represents a nearly seven-fold increase and is the most significant revision among the proposed rates, as per Economic Times.
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For single-screen air-conditioned cinemas, the proposed levy is Rs 200 per show, compared with the existing Rs 45. Non-air-conditioned cinemas would face a proposed charge of Rs 90 per show. The proposal also includes a Rs 100 levy for dramas, jalsas and other entertainment programmes, compared with the existing Rs 50.
A new category of Rs 90 per show has also been proposed for mini-theatres and video screening venues that were previously not covered under the tax structure. The proposal further includes a full exemption for venues screening Marathi and Gujarati films or hosting Marathi and Gujarati plays and concerts.
The entertainment tax structure dates back to 1969 and has not been revised for more than six decades, according to reports. However, the proposed changes have drawn concerns from sections of the film exhibition industry, particularly because the levy would be charged per show rather than per ticket.
If implemented, exhibitors and producers estimate that the revised tax could translate into an increase of around Rs 5 to Rs 10 in average movie ticket prices. However, this is an industry estimate rather than a confirmed ticket-price increase.
The impact of the fixed levy would depend on theatre occupancy. For shows with fewer viewers, the tax burden per ticket would be higher, potentially reducing the revenue available for distribution between exhibitors and distributors, according to the reports.
Mumbai is an important market for India's theatrical sector and is estimated to account for around 20-25% of the country's gross box-office collections. Industry representatives have said that higher local levies could add pressure to an exhibition sector that has yet to fully recover to pre-Covid business levels.
Cinepolis India managing director Devang Sampat said the proposal comes at a challenging time for the exhibition industry and raised concerns about its compatibility with the principle of a “one nation-one tax” framework.
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Karmic Films co-founder Suniel Wadhwa also pointed to the show-based nature of the levy and its potential impact on revenue sharing. The proposal will remain subject to government approval and formal notification. Until then, the existing entertainment tax rates will continue to apply in Mumbai.
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