GST Applicability & Tax Rates on Film and Media Production in India

1. Introduction

India's film and media industry is one of the largest in the world, spanning cinema, television, OTT platforms, advertising, and digital content. With the introduction of the Goods and Services Tax (GST) in 2017, the sector underwent a significant shift in its tax structure. Understanding the GST implications on film and media production is essential for producers, studios, distributors, artists, and service providers involved in content creation.

This article provides a comprehensive guide to GST applicability, tax rates, exemptions, registration requirements, and compliance aspects related to film and media production.

2. Overview of GST Framework

GST is a destination-based indirect tax levied on the supply of goods and services in India. It replaced multiple taxes like service tax, VAT, and entertainment tax. For film and media, GST brought both simplification and new challenges.

GST consists of:

• CGST– Central Goods and Services Tax
• SGST– State Goods and Services Tax
• IGST– Integrated Goods and Services Tax (for inter-state transactions)

Every supplier of goods or services with turnover above the threshold limit must comply with GST laws unless exempted.

3. GST Applicability on Film and Media Production

3.1 Production of Films

Film production involves multiple services and goods: scriptwriting, acting, shooting, direction, sound, editing, VFX, etc.

• GST is applicableon services provided or received by film producers.
• Production housesmust register under GST if their aggregate turnover exceeds ₹20 lakhs (₹10 lakhs for special category states).
• All suppliers and service providers engaged in media production are generally subject to 18% GST.

3.2 Sale and Licensing of Rights

Rights related to films or shows — including theatrical, satellite, music, and digital — are taxable supplies.

4. GST on Services in the Media Industry

Almost all professional services in this industry attract 18% GST, unless exempted under specific circumstances.

5. GST on Cinemas and OTT Platforms

5.1 Cinemas and Multiplexes

• GST on movie tickets priced above ₹100: 28%
• Tickets priced up to ₹100: 12%

The entertainment tax has been subsumed under GST, making the tax regime uniform across states.

5.2 OTT Platforms (e.g., Netflix, Amazon Prime)

• Subscription services attract 18% GST
• Foreign OTT providers must register under GST for OIDAR (Online Information and Database Access or Retrieval) services

6. Input Tax Credit (ITC) in Film Production

Film production involves high input costs — equipment rental, travel, location costs, professional fees. GST paid on such inputs is eligible for ITC, provided:

• The producer is registered under GST
• Inputs are used for taxable supplies (like film sales, rights)

However, ITC cannot be claimed for:

• Personal expenses
• Inputs used in exempt supplies (e.g., if the movie is given for free)

7. GST Registration & Compliance for Media Businesses

7.1 Mandatory Registration

GST registration is mandatory if:

• Annual turnover exceeds ₹20 lakhs (₹10 lakhs for special states)
• You’re involved in interstate supply
• You supply via e-commerce or aggregator platforms

7.2 Filing Requirements

Registered entities must file:

• GSTR-1– Details of outward supplies
• GSTR-3B– Monthly summary return
• GSTR-9– Annual return

8. Special Scenarios and Case Studies

Case 1: Independent Music Producer

An independent artist licenses music to an OTT platform — liable to pay 18% GST on royalty income.

Case 2: Advertising Agency

An ad agency producing commercial videos for YouTube is required to charge 18% GST on its services.

Case 3: Foreign Production House

A US-based production company streams content to Indian subscribers — must register under OIDAR and collect 18% GST.

9. GST Exemptions and Concessions

While most services are taxable, a few concessions exist:

Exports of content are considered zero-rated supplies, allowing for refunds of input tax credit without charging GST to foreign buyers.

10. Challenges and Industry Concerns

• Valuation complexitiesfor bundled rights
• Cash flow issuesdue to delayed refunds of ITC
• Lack of clarity on co-productions and revenue sharing
• Applicability of TDS under GST for aggregators

The industry has repeatedly requested clearer norms, especially for freelancers, small production houses, and digital platforms.

11. Conclusion

GST has brought uniformity but also a level of complexity for the film and media production sector. With almost all services attracting 18% GST, content creators must factor this into budgeting and pricing. Proper registration, documentation, and compliance are crucial to avoid penalties and leverage input tax credit benefits.

Media businesses are encouraged to work with tax consultants to ensure accurate GST treatment, especially for cross-border and multi-party transactions.