The Tamil film industry is facing a major crisis. The 1,100-plus theatres across Tamil Nadu have been shut down for the last two days over the State Government’s decision to impose a 30% local bodies tax on film tickets, over and above the 18-28% GST, which came into effect from July 1.
The estimated losses per day will be around ₹8-10 crore on working days, and may go up to ₹15 to ₹17 crore during weekends. It is pertinent to note that Tamil Nadu has the highest daily footfalls in theatres across India.
Abirami Ramanathan, president of Tamil Nadu Theatre Owners Association, said, “The one-nation, one-tax GST has been passed by the Central Government, and here we are having a State Government introducing a local bodies tax in addition to that. This clearly indicates double taxation, and means that we end up paying 48 to nearly 60% tax on a cinema ticket.” Neighbouring states like Andhra Pradesh, Kerala and Karnataka have abolished local taxes after the GST regime came into force.
As per box-office reports based on the first half of the year, Kollywood is bleeding. Out of 99 films that released till June 30, only one was a mega blockbuster and three others were profitable. The rest have failed to recover their investments. The seven Tamil films that released last Friday were put on hold abruptly, causing huge financial loss to its producers. And, it looks like the 20-plus Tamil films slated for a July release (including Vikram Vedha, Nibunan, Pandigai, Gemini Ganeshanum Suruli Raajanum, Nenjam Marappathillai, Server Sundaram, Meesaya Murukku, Podhuvaga Enmanasu Thangam and VIP 2 ) will have to postpone their release dates if the shutdown continues.
So, why is this additional 30% tax being levied by the State Government? A senior Tamil actor commented, “A majority of Chief Ministers who ruled Tamil Nadu have been from the film industry. Cinema ticket rates were kept artificially at a low rate (₹50 for single screens and ₹120 for multiplexes) and were never increased in the last 10 years. Successive governments have kept the industry in good humour by rolling out attractive tax exemption.Many Tamil films released in the last five years have benefited from entertainment tax exemption given to films with Tamil titles and U censor certificates. The grapevine has it that there were pay-offs to get these exemptions, but nobody dared to speak up about it.”
One actor who did speak up, and quite boldly, was actor Siddharth, who tweeted: “TN govt punished Tamil cinema for years with U certificate and bribes for Tax free & Tamil title scams. Now they want 30% + GST #Shame”.
It remains to be seen how talks between the administration and the stakeholders in the theatre business will pan out. A prominent theatre owner, who controls a large number of screens, says, “The local bodies are paranoid about the industry turning white with only GST tax. All these years, many theatres were hand-in-glove with the local administration in doing exactly what they wanted by having two DCRs (daily collection reports). Now, all theatres want to go clean with GST.”