PVR, Inox Leisure tumble up to 8% on higher-than-expected GST rates

NEW DELHI: Shares of multiplexes tumbled up to 8 per cent in Monday’s trade after the the GST Council fixed rate on movie tickets at 28 per cent, the highest rate in the tax slab.

This equals to the tax applicable for casinos and five-star hotels.

Finance Minister on Friday said, "Cinema halls are currently paying a service tax of 15 per cent plus a state entertainment tax that ranges from 28 per cent to about 100 per cent. All these will be subsumed under 28 per cent GST rate, bringing down costs of service significantly."

According to Angel Broking, these companies may be slightly unhappy that they have been bracketed in the highest category along with gambling and betting activities. That almost looks akin to imposing a “Sin Tax” on movies.

Following the announcement, shares of PVR plunged 7.83 per cent to hit a low of Rs 1400.10 on BSE. Inox Leisure declined 3.56 per cent to hit a low of Rs 277.60 on BSE.