With the State government imposing a local body tax on movie tickets, the Tamil Film Producers Council has said that there would be no Tamil film releases from Friday onwards until the State government removes the 10% entertainment tax and regulates the ticket prices.
The various stakeholders of the film industry, which is burdened by piracy, the Goods and Services Tax (GST) and reducing footfall, will get together on Wednesday to decide on the next course of action. Several multiplexes, including Inox and PVR, will also down their shutters for the second day on Wednesday.
Actor Vishal, general secretary of Nadigar Sangam and president, Tamil Film Producers Council, met producers on Tuesday night to discuss the issue with them. “We are in a disabled situation. We will decide at the meeting (on Wednesday) the next move.”
Later in the evening, he said in a statement, “Various stakeholders have been explaining our position to the State government. However, the State government has levied the 10% entertainment tax without regulating the ticket prices. This will only increase the losses to the producers and create more confusion.”
Theatres in the city have indicated that if the government does not consider their request, they will be forced to go on an indefinite strike. “We know the festive season is nearing and there are some big releases; but we cannot survive with double taxation,” said a multiplex owner in the city.
‘Footfall will be hit’
Well-known distributor Tiruppur Subramaniam said that the entertainment tax would further bring down footfall at theatres. “The theatre owners in Madurai, Coimbatore and Chengalpattu have decided that there should only be ‘one nation, one tax’. If the State government does it, we will continue running the shows. If not, we will shut down the theatres. We hope the actors take the lead on this issue,” he said.
The local body entertainment tax either increases the tax cost and leaves much lesser net revenue to be shared between exhibitors and producers/distributors, or pushes up ticket prices for cinema goers, thus affecting their cost of entertainment as well as footfall for the industry.
Mr. Deepak Asher, President of the Multiplex Association of India, said, “The film industry, already reeling under a 28% GST — the highest slab — cannot afford to bear the burden of additional local body entertainment tax. This will make the business completely unviable.”
On Tuesday, all multiplexes that are members of the Multiplex Association of India remained shut. These included five multiplexes and 27 screens belonging to the two largest players in the industry – PVR and INOX. Mr. Asher said, “In addition, we are told that the Film and TV Producers Guild has also decided to join the strike and they too shall not be releasing any new films in Chennai from Friday till this matter is resolved to the satisfaction of all concerned.”
According to the Multiplex Association of India, while some State governments have authorised local bodies within their jurisdiction to levy entertainment tax, no local body in India has done so, with the exception of Chennai. The Greater Chennai Corporation is the only local body in India to start levying local body entertainment tax, in addition to GST. The association also said that the estimated loss per multiplex property due to closure could be ₹6 lakh per day.
“This is an average ballpark figure. Besides, the State is losing out on tax revenues and producers and distributors are losing out on collections,” Mr. Asher said.
