Clarity continues to elude cinema ticket pricing in Tamil Nadu, with the State government yet to review the levy of local body taxes on such tickets, over and above the Goods and Services Tax (GST). Against this backdrop, cinema screenings have been cancelled across the State from July 3.
“We are aware of the issue and have received representations from the industry. The Constitution provides for levy of local body taxes. We will bring this issue to the attention of the Chief Minister and review it,” Finance Minister D. Jayakumar told mediapersons here on Saturday.
The GST Council has fixed the tax rate for cinema tickets under two categories: 18% for tickets costing less than ₹100 and 28% for tickets priced over ₹100.
Currently, cinema ticket prices in Tamil Nadu are capped at ₹50 for single screens and ₹120 for multiplexes with three or more screens. The price is inclusive of entertainment tax, which ranges from 20% to 30%, based on location, i.e. cities or districts. With local bodies falling outside the purview of GST, they are allowed to impose local taxes over and above GST.
“The Tamil Nadu government has issued an ordinance stating that theatres have to pay 30% local body taxes. This is in addition to GST, and on each local body tax, we have to pay 8% GST. So, the total tax rate is 66% in Tamil Nadu. For a ticket costing ₹100, we will be paying almost ₹66 as tax, which is unviable,” said Abirami Ramanathan, president of Tamil Nadu Theatre Owners and Distributors Association.
Meanwhile, C. Chandramouli, secretary, Commercial Taxes and Registration department, said that the government was still reviewing the granting of tax exemptions for films with Tamil titles.
Asked whether the cap on ticket prices would be raised, the Finance Minister said the issue would be brought to the Chief Minister’s notice and reviewed. He also noted that tickets are priced below ₹100 in around 80% of cinemas in the State.
