India next stop for amusement parks

Ajay Sarin, President, Indian Association of Amusement Park & Industries (IAAPI), speaks with TravTalk about the upcoming expo

Q. What will the next edition of IAAPI Amusement Expo hope to achieve?

The forthcoming IAAPI Amusement Expo will showcase new rides and attractions manufactured by leading ride manufacturers from around the globe. This year the expo is spread across 10,000 sqm with participation of over 120+ exhibitors from 21 countries like Bulgaria, Canada, China, France, Germany, Hong Kong, Italy, Malaysia, the Philippines, the UAE, the UK and USA along with India. This year’s expo will help Indian park operators source high-quality precision rides. As our industry is highly seasonal in nature, new attractions will help to increase footfalls. This show will also help Indian park operators to explore possibility of joint venture in setting up operation of parks/FECs in India and overseas and for manufacturers to get into technical tie-ups.

Q. How has service tax impacted the industry?

Implementation of service tax in the Union Budget 2015-16 effective from June 1, 2015 is having a cascading effect on the industry. The State Government is already charging entertainment tax and in addition to the state levy, the amusement sector had to take the burden of service tax of 15 per cent and unlike any other sector the input credit available to set off the service tax paid is negligible. Hence, our industry ends up paying a substantial amount of tax which leads to dual taxation.

Q. How is this affecting the industry?

The high rate of taxation is dissuading new entrepreneurs from entering the industry with new formats and also preventing current industry players from adding both Capex and new centres. Entrepreneurs, thus, are seeking to explore other investment avenues. Globally, in markets where GST has been introduced, the tourism rate is half of the GST rate and is under 10 per cent. Everyone recognizes it as critical.

Q. What investment incentives is IAAPI expecting?

The Indian amusement industry has an annual revenue of approx. ` 17 billion and estimated to grow to at least rs. 40 billion by 2020 growing at 17.5 per cent CAGR with capital investing of about Rs. 7,770 crore. An aggregate of 480 amusement parks, FECs and allied industries generate around 80,000 employment. With a capital investment of this magnitude, our industry generates a higher employment base as compared to other industries like manufacturing pharmaceuticals etc. With the right support, with a lower capex spend, higher employment can be generated by us.”

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