The final round of talks between the film industry and the State government on the contentious issue of levy of local body taxes on cinema tickets over and above the Goods and Services Tax (GST) has ended without arriving at a solution. Sources say a decision by the government is likely in the next two days.
With the objective of resolving this issue, a committee constituted by the government received representations from the Tamil Film Chamber of Commerce, including those of Abirami Ramanathan, president of the Tamil Nadu Cinema Theatre Owners Federation, Vishal, actor, general secretary of the Nadigar Sangam and president of the Tamil Film Producers’ Council, as well as State government officials from various departments such as the Commercial Taxes and Registration, Home, Prohibition and Excise, Rural Development and Panchayat Raj and Finance.
The panel conducted its second and final round of talks with industry representatives on Monday, but failed to bring about a solution.
“We represented our concerns about the levy of local body taxes. The government officials said they would discuss these with the Chief Minister and other Ministers and communicate their decision to us. As of now, the status quo continues. We are hopeful of a positive decision,” Mr. Ramanathan told The Hindu .
Another source who was present at the meeting said that the film industry stuck to its stand that the main theme of the Goods and Services Tax was “one nation and one tax”, and was firmly opposed to the levy of local body taxes.
Tamil Nadu has 1,127 screens with over 6.14 lakh seats. The ticket prices, which were capped at ₹120 for multiplexes, have now gone up to slightly over ₹153, including the GST of 28% for tickets priced over ₹100. GST of 18% will be charged on tickets priced at ₹100 or less.
Stark choice
Prior to the GST coming into force, the State used to share the revenue from entertainment tax with the local bodies. Entertainment tax is now subsumed under the GST. The State has to either empower local bodies to levy the entertainment tax or compensate them for the loss of revenue, the Fifth State Finance Commission (FSFC) had recommended.
Earlier this month, cinemas across Tamil Nadu downed their shutters for four days in protest against the State government’s move to add a 30% local body tax. The loss incurred by the cinemas during this period was pegged at ₹15 crore.
