Located at Kondapur in Hyderabad, Tollywood actor Mahesh Babu‘s new theatre, AMB (Asian Mahesh Babu) Cinemas, has received a show cause notice on Tuesday for violating GST norms. Inaugurated in December last year, AMB Cinemas was one of the few theatres which was continuing to charge old GST rates, despite the GST Council announcing that tickets worth Rs 100 and above would fall in the 18 per cent tax bracket instead of the earlier 28 per cent while for tickets less than Rs 100, it would fall in the 12 per cent tax bracket instead of the earlier 18 per cent.
The announcement was put into practice from January 1 this year but the Union government’s directives, GST Rangareddy anti-evasion teams have found out that AMB cinemas in Gachibowli had pocketed Rs 35 lakh in January 2019 while violating the anti-profiteering clause in the CGST Act. The RR GST Commissionerate anti-profiteering of wing inspected various multiplexes within Hyderabad and Secunderabad cities and collected sample tickets from a few after which they issued a similar notice to the management of the multiplexes and single-screen cinema theatres that indulged in GST violations.
Speaking to TOI, a top functionary from Asian Cinemas said, “There was no notice served to AMB Cinemas. The figure of Rs 35 lakh is inflated, the actual figure would be around Rs 20 to 25 lakh. However, immediately after we came to know that PVR Cinemas had reduced their ticket prices, we too did the same from Rs 200 to Rs 185 at the end of January.”
However, the officials reportedly said, “The owners of AMB Cinemas have not brought down entry ticket price despite GST rate reduction from 28 per cent to 18 per cent on Rs 100 and above tickets and 18 per cent to 12 per cent on below Rs 100 ticket, with effect from January 1, 2019. Hence, the undue profit accrued to him by pocketing differential amount of unchanged ticket price and now brought down price of ticket, had to be paid back to the consumer welfare fund, forthwith.”
An official told a leading news agency that as per Section 171 of CGST Act, the reduced benefit on tax should be passed on to the consumers otherwise a penal action will be initiated.