Your days of fun and frolic at amusement parks have been numbered. Water slides and rollercoaster rides are now a luxury taxed at 28% under the GST regime
Text: Rochelle D’Souza Images: Various sources
It’s not just your restaurant bill that you have to worry about post-GST, as it turns out GST has also come down hard on amusement parks and related industries putting them in the luxury tax bracket of 28% making them not only inaccessible to the general public but also unviable.Your days of fun and frolic at amusement parks have been numbered. Water slides and rollercoaster rides are now luxury taxed at 28%. In a meeting held in Kochi on Saturday, the members of the Kerala Chapter of the Indian Association of Amusement Parks and Industries (IAAPI) came together to share their post-GST woes. The issue at hand – under the new regime the amusement park industry has been treated as a luxury item and placed in the same tax bracket as casinos and gambling.
“80% of our customers are middle class and our main customers are government schools and private schools alike, Kudumbashree, anganvadis and so on. Most schools in the state see amusement parks as a safe and secure destination where they can send their students without apprehension and this higher tax will be a major blow to us.” said Simon K Francis, Joint Managing Director of Dream World Water Park in Chalakudy. The Kerala chapter on IAAPI includes parks like Dream World, Chalakudy, Silver Storm, Athirampilly, Wonder La in Kochi and six other theme parks and many family entertainment centres all over Kerala.
Previously, amusement parks in Kerala were charged entertainment tax by local bodies on the basis of the investment made by each park. In June 2015 the central government introduced service tax to the parks in addition to the entertainment tax which is already being collected and now with the GST at the rate of 28% the parks will turn expensive for regular customers while also facing the issue wherein new entrants into the amusement industry would be deterred.
“Our industry is highly capital intensive and its operational costs are also high. With the advent of new technology our rides also become obsolete within a short span. Unlike other industries ours doesn’t consume major raw materials and the input credit which can be availed from the purchases will not be more than 3%. Therefore it makes the amusement industry unviable to sustain at such high GST rates.” said V ASiraj, the director of Silver Storm water theme park at Athirampilly.
GST rates in other countries for the amusement industry is no higher than 10% and the IAAPI has urged the government to reduce the taxation rate from 28% to 12% as well as to exempt schools and educational institutions from the levy of GST and classify the parks in a separate category.