‘The Kerala Story’ becomes tax-free in two Indian states. What does it mean for audiences?

The year’s most controversial film yet, The Kerala Story has been declared as tax-free in the Indian states of Uttar Pradesh and Madhya Pradesh. What does it mean for the audience? Will ticket prices be cheaper? Let’s take a look.

The Kerala Story released in theatres in India on May 5, 2023. The controversial film delivered one of the highest opening weekend collections for this year, at more than Rs 35 crore.

Madhya Pradesh Chief Minister Shivraj Singh Chouhan declared The Kerala Story tax-free in the state, adding in a video clip that the movie "should be watched by all". Soon after, Uttar Pradesh Chief Minister Yogi Adityanath shared on social media The Kerala Story will be tax-free in the state.

What does tax-free status mean for a movie?

So, when a movie is declared tax-free, what does it mean for audiences in the state? It means that the film’s makers and exhibitors will be exempt from half of the entertainment tax levied on the film.

When does a state government declare a movie tax-free?

A state government or chief minister’s office may exercise discretion in declaring a film tax-free.
The decision may be taken based on the topic of the film and if the government wants to create awareness around the topic, or the relevance of the topic to the current social scenarios.

Does tax-free mean movie tickets are free?

A film is made tax-free so that due to lesser entertainment tax, audiences in turn have to pay a much lesser price for the ticket. So, a movie ticket that may be costing upwards of Rs 250, may be available for Rs 100 if the film is tax-free.

Post the implementation of the Goods and Services Tax (GST), movie tickets had a 28% tax rate. Now, post two different GST rates, there is 12% GST on tickets priced below Rs 100, and 18% GST on tickets priced above Rs 100.

Thus, making a movie tax-free would lower the GST percentage as well. Also, the revenue generated from the tax is equally shared between the federal and state governments.

Does the movie’s cast and crew gain from tax-free status?

It is to be noted that the movie’s cast and crew does not get any benefits from its tax-free status. However, it does help in further boosting the film’s revenue at the box office and may increase its run in theatres.

FAQs:

Q1:When did The Kerala Story release?
On May 5, 2023, The Kerala Story was showcased in theatres.

Q2:Which states have made The Kerala Story tax-free?
Madhya Pradesh and Uttar Pradesh.