THEBUSINESSBYTES BUREAU

NEW DELHI, SEPTEMBER 2, 2026

The Indian Association of Amusement Parks and Industries (IAAPI) has called for rationalisation of GST on amusement and entertainment attractions, saying a reduction to 5 per cent without input tax credit (ITC) could lower ticket prices, boost footfalls and encourage fresh investments in the sector.

The demand comes against the backdrop of an industry survey conducted by IAAPI's Research & Analysis Committee, which found strong support among operators for a simpler tax regime.

According to the survey, 84 per cent of amusement industry operators described the existing 18 per cent GST rate as high, while 62.3 per cent said they would prefer a flat 5 per cent GST rate without ITC.

Nearly 69 per cent of respondents said they would reduce ticket prices if GST was lowered to 5 per cent without ITC, potentially making visits to amusement parks, water parks and indoor entertainment centres more affordable for families.

"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," IAAPI Chairman Ankur Maheshwary said.

"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," he added.

IAAPI said around 80 per cent of visitors to amusement parks belong to middle- and lower-middle-income households, making the tax burden particularly relevant to consumer demand.

The association said the existing GST rate has adversely affected footfalls and muted customer demand, while arguing that amusement parks should receive tax treatment comparable with other segments of the tourism ecosystem.

Hotel accommodation with room rent of up to Rs 7,500 attracts 5 per cent GST, while economy-class airfares are also generally taxed at 5 per cent. In comparison, amusement park entry tickets, which typically range between Rs 500 and Rs 1,800 during peak seasons, attract 18 per cent GST.

IAAPI said this differential taxation places an additional burden on amusement parks and makes the sector comparatively less competitive despite its contribution to tourism, employment, local businesses and the broader economy.

The association argued that amusement parks are an integral part of India's tourism and entertainment ecosystem and there is a strong case for bringing the GST rate on entry tickets at par with other tourism-related services.

The survey also highlighted limitations in the current ITC mechanism, particularly for smaller operators. Around 63.6 per cent of respondents said they currently offset less than 25 per cent of their GST liability through ITC.

At the same time, 61 per cent of respondents reported turnover of less than Rs 25 crore, indicating that small and mid-sized businesses constitute a significant portion of the industry.

The proposed 5 per cent GST rate could have an impact beyond ticket pricing, according to the survey.

About 64.9 per cent of operators identified higher customer demand as a key potential benefit of GST rationalisation, while 62.3 per cent expected facility expansion. Around 61 per cent anticipated revenue growth and 54.5 per cent saw scope for new investments in projects.

IAAPI said the industry's demand for GST rationalisation is not aimed merely at improving margins but at stimulating consumer demand, reinvestment and expansion.

"The industry is not looking at GST rationalisation 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," the association said.

IAAPI said a simpler and more rational GST structure could support the industry's growth while making leisure and entertainment more accessible to consumers.

The association said it would continue to engage with policymakers and other stakeholders, using industry data and feedback from its members to make a constructive case for GST reform.