IAAPI Calls for GST Rationalisation to Support Growth and Consumer Demand in India’s Amusement Industry

Against this backdrop, the Indian Association of Amusement Parks and Industries (IAAPI) is calling for a more rational GST structure for the amusement industry. The association believes that bringing down the GST burden can help make entertainment more affordable for consumers while giving businesses greater room to invest, expand and create employment.

IAAPI’s Research & Analysis Committee recently conducted its member survey, receiving overwhelming response from industry operators from across the country. The findings offer a clear picture of how the industry views the current tax structure. 84% of operators described the existing 18% GST rate as high, while 62.3% said they would prefer a flat 5% GST rate without Input Tax Credit (ITC).

Importantly, the industry says the benefit would not necessarily stop businesses. Nearly 69% of operators said they would reduce ticket prices if GST were brought down to 5% without ITC. This could make visits to amusement and recreational attractions more affordable for families and encourage more people to spend on leisure and entertainment.

Ankur Maheshwary, Chairman, IAAPI, said, “The amusement industry is ultimately about creating experiences for people and bringing families together. But for many operators, particularly smaller and mid-sized businesses, the current GST structure adds to the pressure on an already capital-intensive business. A more rational rate can create a win-win situation — consumers can benefit through more affordable tickets, while operators can focus on improving their facilities, creating new experiences and expanding their businesses.”

Notably, overwhelming majority (approx. 80%) of the visitors to amusement parks belong to middle and lower-middle-class households, the very demographic that the GST 2.0 reforms sought to protect. Present GST rate adversely impacts footfall, muting customer demand.

Amusement parks are an integral part of the tourism industry and contribute significantly to the growth of tourism, employment, local businesses, and the overall economy. However, the sector is treated unequally compared with other important components of the tourism industry, such as hotels and airlines. Hotel accommodation with room rent up to ₹7,500 is subject to 5% GST, while economy-class airfare is also generally taxed at 5% GST. In contrast, amusement park tickets, which typically range from ₹500 to ₹1,800 during peak seasons, are subject to 18% GST. This substantial difference in taxation places an additional burden on the amusement park industry and makes it comparatively less competitive. Since amusement parks form an important part of the tourism and entertainment ecosystem, there is a strong case for rationalising the GST rate applicable to amusement park entry tickets and bringing it at par with other tourism-related services.

The survey also highlights why the current ITC mechanism does not provide equal benefit to all operators. Around 63.6% of operators said they currently offset less than 25% of their GST liability through ITC. At the same time, 61% of operator respondents reported turnover below Rs 25 crore, indicating that smaller and mid-sized businesses form a significant part of the industry.

The expected impact goes beyond ticket prices. 64.9% of operators identified increased customer demand as a key benefit of a 5% GST rate, while 62.3% expect facility expansion, 61% anticipate revenue growth and 54.5% see the possibility of new investments in projects.

What stands out from the survey is that the industry is not looking at GST rationalization simply as a way to improve margins. Operators are looking at it as an opportunity to attract more customers, reinvest in their facilities and build a stronger amusement ecosystem.”

IAAPI believes that a simpler and more rational GST structure can support the industry's growth while making leisure and entertainment more accessible to consumers. The association will continue to engage with policymakers and stakeholders, using industry data and member feedback to make a constructive case for GST reform.