Smoke free premises sub-committee
The Welsh film and television industry has warned that the loss of major drama productions to England due to the smoking ban could cost millions of pounds and damage the sector here.
But the chair of the Assembly's health committee said the call for Wales to have a similar exemption to England was "fundamentally morally repugnant".
AMs were taking evidence on 22 January 2013 on whether Wales should introduce an opt out to the smoking ban for film and television productions similar to that which is in force in England.
Anti smoking groups are strongly opposed, telling AMs that the legislation was designed to protect workers and should remain in force.
Felicity Waters from Action on Smoking and Health Wales said: "This, we would argue, is a matter of convenience for the television industry - and health legislation should not be amended on commercial grounds.
"What industry is going to come next?
"Which industry is going to come forward next and challenge this legislation and ask for an amendment of its own?
"What are we going to say to them if we have allowed one?"
Her stance was backed by the British Heart Foundation and Cancer Research UK who said there is no safe level of smoke and that the ban on smoking indoors should remain absolute in Wales on public health grounds.
But Clare Hudson, Head of BBC Cymru Wales Productions was adamant the creative industry in Wales is losing out due to the ban on filming.
"What we are concerned about is that if we want the sky to be the limit for production in Wales, we need to be perceived as, and actually be, a can do place where all things are possible in drama," she said.
"An independent company can go and make a show anywhere - with new tax breaks coming in there will be more American companies who make decisions utterly ruthlessly.
"We may have a situation where our drama slate within Wales is potentially damaged by people making decisions on the basis of 'oh, they won't let us smoke, that's a key part of this drama, let's do it somewhere else'".
She added that losing out on a drama production in Wales could potentially cost between £500,000 and £10-12m to the economy.
Independent producers association PACT said in their written evidence there was a strong commercial need for the amendment, calling it an "economic barrier" to film and TV production in Wales.
Both sides disputed the cost to producers of using Computer Generated Imagery (CGI) in post-production to show smoking without actors having to smoke on set.
PACT said a ten second close up shot using CGI could cost up to £30,000.
Anti smoking groups said the cost was considerably lower.
The Labour chair of the Health Committee, Mark Drakeford AM said he was unconvinced by the argument that there should be an exemption in Wales because one existed in England.
"The argument you use, in comparing Wales with Bristol, for example, is a fundamentally morally repugnant argument," he said.
"You are suggesting to us that something bad happens somewhere else, and because it's allowed to happen somewhere else, we should allow it to happen in Wales."
Ms Hudson responded that the sole interest was in ensuring maximum authenticity in drama production.
The government has committed to allowing AMs to decide on whether the rules should be changed to allow the exemption and a vote is expected later in the spring.