When does a movie gets the status of ‘tax-free’?

March 20: Well, with the huge business being done by the movie ‘The Kashmir Files’, the issue of declaring it as ‘tax-free’ has gained momentum in many of the Indian states. However, there are no fixed criteria for a film to claim or enjoy tax exemption and the decision to give up tax revenues by state governments are taken on a film-to-film basis.

As a general rule, when a film deals with any socially relevant topic, state governments usually exempt it from tax with the intention of making it accessible to a wider audience. In the GST regime, two slabs of GST were imposed on movie tickets- 12% GST on tickets costing less than Rs. 100 and 18% on more expensive tickets. So when a state declares a film tax-free now, only the SGST component is waived, while the CGST continues to be levied. So tax-free films in the present context means waiving off the State GST component.