gst Accounting and taxation for cinema hall

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kollipara sundaraiah (Querist)
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08 February 2022 Sir,
A person running a cinema theatre new regular scheme registered recently in gst act.
Question:
1. Gst accounting records maintained and taxation for cinema hall
2.business or service category applicable in gst act.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 1. GST Accounting Records for Cinema Hall:

For a cinema theatre registered under GST, the following accounting records should be maintained:

• Sales Register: Record all ticket sales, including different rates (e.g., regular, premium, student discounts).
• Purchase Register: Record purchases of goods and services related to operating the cinema (e.g., concessions, maintenance services).
• Input Tax Credit (ITC) Register: Track GST paid on purchases that can be used to offset GST liability on sales.
• Output Tax Register: Track GST collected on ticket sales and other taxable supplies.
• Cash Book and Bank Statements: Record all financial transactions related to GST.
• GST Returns: File regular GST returns (GSTR-1 for outward supplies, GSTR-3B for summary of sales and purchases) based on prescribed timelines.

2. Business or Service Category under GST:

Under the GST Act, a cinema theatre falls under the category of “Entertainment Services.” Here’s how it applies:

• Business Category: A cinema theatre is considered a business entity providing entertainment services to customers. It involves selling tickets for viewing movies or other entertainment content.
• Service Category: Specifically, it falls under the service category of “Theatrical Exhibition Services” or “Entertainment Services” as per GST classifications. This means that GST is applicable on the ticket sales and other revenue generated from the screening of movies or events.

Taxation for Cinema Hall:

• GST Rates: The applicable GST rates for cinema halls were revised over time. As of my last update, there are two GST rates applicable:
• 18% GST on tickets priced above Rs. 100 per person.
• 12% GST on tickets priced up to Rs. 100 per person.
• Input Tax Credit (ITC): Cinema theatres can claim ITC on GST paid for goods and services used in their operations, such as concessions, maintenance, and other operational expenses.

Compliance Requirements:

• GST Registration: Registration under GST is mandatory for cinema theatres with a certain turnover threshold.
• GST Invoicing: Issue GST-compliant tax invoices to customers for ticket sales.
• GST Returns: File GST returns as per the prescribed timelines to report sales, purchases, and pay GST liability or claim refunds.