The Brihanmumbai Municipal Corporation has proposed raising the entertainment tax for multiplexes from Rs 60 to Rs 400 per show. While the proposal awaits state approval, it creates uncertainty for cinema operators who fear the additional fixed cost could lead to higher ticket prices. The move has faced strong opposition from industry bodies due to concerns over post-pandemic recovery and potential declines in audience footfall.
The Brihanmumbai Municipal Corporation (BMC) has put forward a proposal to significantly increase the entertainment tax levied on cinema screenings in Mumbai. Under this plan, the tax for multiplexes would rise from the current Rs 60 to Rs 400 per show, representing a 570% increase. The proposal also outlines new tax structures for single-screen theaters, with proposed rates of Rs 200 per show for air-conditioned venues and Rs 90 per show for non-air-conditioned venues.
Impact on Cinema Operations
A critical detail for investors and cinema operators is that this tax is applied on a per-show basis rather than per individual ticket sold. This structure creates a fixed cost that must be paid regardless of how many people attend a movie. For cinema operators, this means that shows with low occupancy will now face a much higher tax burden relative to their revenue, putting pressure on profit margins. If cinema owners choose to protect their margins, they may be forced to pass these increased costs on to moviegoers through higher ticket prices.
Exemption and Approval Status
The proposal includes a 100% tax exemption for Marathi and Gujarati films, plays, and concerts, intended to support regional content. However, the plan is not currently in effect. To become law, it requires approval from the Maharashtra government's Urban Development Department. As of October 2026, the proposal is in the administrative review stage and has faced resistance even within the BMC's own law committee, as well as from industry groups.
Industry Concerns
The All Indian Cine Workers Association (AICWA) has formally expressed strong opposition to the hike. Industry stakeholders have noted that the film exhibition sector is still working to stabilize footfall and revenue to pre-pandemic levels. Executives fear that an increase in operational costs at this stage could discourage theater attendance, which is already sensitive to ticket pricing. There is also concern that if this proposal is implemented in Mumbai, it could set a precedent for other regions to adopt similar tax measures, potentially impacting the national exhibition landscape.
For investors and industry followers, the next important development will be the decision from the Maharashtra state government regarding this proposal. Tracking the discussions between industry bodies and the Urban Development Department will be key to understanding whether the proposal is implemented in its current form, modified, or rejected.