``While entertainment tax on films has gradually been reduced from 70% to an average of about 50%, we have recommended a further reduction to 25-30%,'' I&B minister Priya Ranjan Dasmunsi said. ``This will give a boost to the exhibition sector and reduction of ticket rates would encourage more viewership,'' he added. The ministry has set up a committee that will examine differential taxation in the country and suggest a uniform rate. A consensus on the issue is likely to emerge by December.

A cut in entertainment tax can affect the fortunes of a film substantially. Says distributor Sanjay Mehta, whose film Omkara was made tax-free in Uttar Pradesh, ``The film's collections went up by 15-20% after the tax exemption.'' The story is similar with small films made for niche audiences like Iqbal and Hanuman. However, Mehta adds that a tax exemption would not help a bad film but give the `right' boost for a good one. Mehta said that a drop in ticket prices would ``marginally affect'' cinema audiences though it would bring in substantially more students.