The president of Film and Television Producers Guild of India, Siddharth Roy Kapur, on Sunday said the government’s decision to put cinema tickets under the 28% tax bracket in the new goods and services tax regime posed a “real danger” to the film industry. Kapur said the decision is a “huge setback” for the film industry, which is already grappling with problems such as piracy and the lack of fresh investments in cinema screens.

Kapur said in the current tax structure, the cinema exhibition sector was exempted from service tax and state value added taxes, and only entertainment tax was imposed on cinema tickets. “The average entertainment tax collected nationally by the government across all states and languages was in the range of 8% to 10% of gross box office revenue,” the filmmaker said in an official statement. “Hence, logically the GST rate should not have been more than 12%.”

Kapur said there was a “lack of interest and support from the government” to the Indian film industry. “It is disheartening that the Government does not see the immense contribution that a vibrant ‘Make In India’ film production sector can have in enhancing the soft power of the country.”

The GST Council on Friday had clubbed commodities under seven categories of taxes – zero per cent, 5%, 12%, 18%, 28%, a special category and a luxury items category.