Beyond the immediate financial impact, exhibitors are concerned about consumer sentiment as higher ticket prices could make moviegoers more selective
Maryam Farooqui
October 09, 2026 / 10:01 IST
movie-theatre
- BMC proposes raising cinema tax from Rs 60 to Rs 400 per show.
- Exhibitors warn price hikes will hurt ticket demand.
- MAI is in talks with the Maharashtra government to reconsider.
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The Multiplex Association of India (MAI) is in talks with the Maharashtra government over a proposed steep increase in entertainment tax on cinema shows in Mumbai, with exhibitors warning that the move could push up ticket prices, hurt demand and make investments in new screens less attractive.
Cinepolis India managing director Devang Sampat said the multiplex association, along with the producers’ association, has submitted a representation for reconsidering the proposal and is awaiting government’s response.
“The issue is not about whether the tax is being increased by one rupee or two rupees, or whether we can absorb the increase. It defeats the purpose of ‘one nation, one tax’ that the government wanted to achieve through GST,” Sampat told Moneycontrol.
The Brihanmumbai Municipal Corporation (BMC) has proposed raising the tax on air-conditioned cinema halls and multiplexes from Rs 60 to Rs 400 a show, an increase of nearly 567 percent.
The proposal is awaiting approval from the state’s urban development department, with existing rates continuing until the revised structure is notified.
Sampat warned that the move could set a precedent for other states to introduce similar levies, adding to the tax burden on cinema operators across the country.
The proposed increase is calculated on a per-show basis rather than per ticket.
For a cinema running five shows a day, the additional levy would amount to Rs 1,700 daily, or about Rs 51,000 over a 30-day month, assuming the proposed increase of Rs 340 applies to every show.
The impact could be particularly significant for shows with low occupancy, where a fixed tax has to be paid regardless of how many tickets are sold.
Sampat said exhibitors would ultimately have to pass on at least part of the additional burden to moviegoers. However, the increase in ticket prices could have a cascading effect because exhibitors share box-office collections with distributors and also incur other costs linked to ticket revenue.
“Even if the increase is only Rs 10, we eventually have to pay GST on that. We have to pay the distributor’s share and the mall owner on whatever increase we charge on the ticket,” he said.
The additional tax, therefore, does not translate into a straightforward increase of the same amount in the ticket price. The cost can compound as it moves through the industry’s revenue-sharing structure, Sampat said.
Exhibitors are also concerned about consumer sentiment. Higher ticket prices could make moviegoers more selective, particularly when a film has weaker audience appeal, potentially influencing the number of shows allocated to it.
Sampat said the industry was working with governments to improve India’s screen density, which remains low compared with several markets. An additional tax burden could make investments in new screens less attractive, he said.
Request to reconsider proposal
Multiplex Association of India president Kamal Gianchandani has urged the state government to reconsider the proposed increase and create a more supportive environment for consumers, exhibitors and the wider film industry.
“A fixed levy of Rs 400 per show puts a significant additional burden on the economics of exhibition,” Gianchandani said.
A steep increase in the cost of exhibition, he said, could make operations more difficult for both multiplexes and single-screen theatres.
Karnataka’s 2% cinema cess in limbo
The Mumbai proposal comes as a dispute brews in neighbouring Karnataka over a planned 2 percent welfare cess on cinema tickets, a move contested by exhibitors.
The cess was scheduled to take effect on September 30 under the Karnataka Cine and Cultural Activists (Welfare) framework. However, Sampat said it is not being collected as the matter is still under discussion and in court.
On September 30, the Karnataka High Court recorded the state government’s assurance that it would not take coercive action against the petitioning theatre operators until the next hearing. The court had not granted a stay on the operation of the Act at that stage.
Maryam Farooqui is Senior Correspondent at Moneycontrol covering media and entertainment, travel and hospitality. She has 11 years of experience in reporting.
first published: Oct 9, 2026 10:01 am
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