Want to pay lower GST? Don’t buy popcorn with movie ticket

economictimes.indiatimes.com:

NEW DELHI: Next time you plan to go to a theatre, make sure you don’t go for any combo package that offers food and beverages along with the movie ticket. While the GST Council has decided to lower the levy on food and beverages sold at theatres to 5% from 18%, the benefit will only accrue if the two are paid for separately.

“When bought together, it is treated as a composite supply and the principal supply there is watching the movie, or giving access to the cinema hall, which is chargeable at 18% tax. Food happens to be incidental, and billing is done in a consolidated way.

But if you just buy the cinema ticket for entry, and purchase food subsequently, it will not be billed with the ticket, andyou will pay 5%,” Central Board of Indirect Taxes and Customs chairman Vivek Johri told TOI. The top official suggested that the principle will apply even if the ticket is bought online.

“As long as they are billed separately, they will be charged at different rates,” he said. While the GST Council has reduced the rate on food and beverages to bring it in line with the levy in restaurants, it is now for cinema halls to pass on the benefit to consumers, something that authorities will have to keep an eye on.