Wacky Tax Wednesday: First Bollywood movie to be exempted from GST

Ever thought that a movie highlighting India’s flagship Swachh Bharat (Clean India) campaign, started as an effort to eliminate public defecation, could catch the eye of tax authorities? Tax laws can sometimes be a bit absurd and in yet another Wacky Tax Wednesday story, we are taking you to one of India’s largest states, Uttar Pradesh, where a Bollywood movie starring Indian actor Akshay Kumar was given a special VAT, and later GST exemption because the movie promoted the need to build toilets within homes and curb open defecation.

Defecating outdoors is quite common in villages in the State of Uttar Pradesh and villagers are known to form groups that wake up at specific times, sometimes as early as 4 am to walk a few miles to fields marked for defecation. The movie, Toilet - Ek Prem Katha (translates to Toilet - a love story) featured a similar story of a new bride refusing to adhere to the concept of outdoor defecation and her husband giving in to her demands of building a toilet within the house (a concept that has been quite averse in certain parts of India as it is considered unhygienic to defecate near an area where food is prepared). 

Although the movie was released across India, the Uttar Pradesh government granted an exemption of VAT on movie tickets to encourage more people to watch the movie that promoted a cause in the public interest. Although the Value Added Tax was later subsumed in the same month with the implementation of the Goods and Services Tax, the Uttar Pradesh government announced that the movie fell under one of the eight categories under which an exemption is granted. 

Additionally, the movie was shot in the State of Uttar Pradesh to maintain authenticity and as per another GST exemption category, if more than 50% of a movie is shot within the State of Uttar Pradesh, a GST exemption is granted on the tickets. 

In a similar move, to promote awareness advocating menstrual hygiene, the Centre exempted the tax on the sale of sanitary napkins across the country after a public interest movie starring Akshay Kumar called Padman was released.