The Tamil Nadu government’s decision to impose a 30% tax on film tickets to be levied by local bodies in addition to the 18-28% Goods and Services Tax has put a question mark over the Tamil film industry’s future. In response, the Tamil Nadu Theatre Owners and Distributors Association decided to collectively protest against this decision by shutting down 1,127 screens across the State on Monday.
Despite the representatives of the Tamil film industry holding discussions with Chief Minister Edappadi K. Palaniswami and other senior ministers in the government, the theatre owners have announced that the strike would continue on Tuesday as well.
Another round of talks
Actor Vishal, general secretary of Nadigar Sangam and president of Tamil Film Producers’ Council, confirmed that there would be another round of talks. "We met the ministers and the government officials. They have asked us for one more day’s time to look into this issue. We will be having another round of meetings with them on Tuesday evening. Theatres will remain closed on Tuesday," he said.
The strike against the State government comes at a time when it was believed that the implementation of GST would reduce the Tamil Nadu State government’s meddling in the affairs of the Tamil film industry.
Not against GST
Several theatre owners underlined that they are not against a common tax structure for the country but they only oppose two taxes. "We welcome a common tax for the country. What we are against is the 30% local body tax. Since we have a cap on ticket prices, we cannot pass on the taxes to the public. If theatres have to pay tax from the movie ticket, it reduces the producers’ and the distributors’ share considerably. Such a high tax is a huge blow," said Archana Kalpathi, CEO, AGS Cinemas.
Ms. Kalpathi said that the industry has survived the cap on ticket prices for 10 years because the State has one of the highest occupancies in the country.
Inflation, wages
“The ticket prices don’t reflect the inflation, rise in wages, increasing operational costs and so on. We have been bailed out by high occupancies and exemptions from entertainment tax. But this new tax is unsustainable,” he said.
In Tirupur alone, more than 56 theatres were empty. The scenario wasn’t too different in Coimbatore, Erode, the Nilgiris, Madurai, Pudhucherry and other places as well.
Most theatre owners had similar opinions about how the additional burden of 30% local tax will make film distribution and exhibition an impossible business to pursue.
This double whammy, theatre owners feel, is unbearable especially at a time when bigger theatres in places including Madurai were closing down and big ticket theatre chains were giving smaller players a run for their money.
In the Coimbatore belt, curtains were down at more than 175 theatres. R.S. Baalu, secretary, Coimbatore, Tirupur, Erode and the Nilgiris Districts Theatre Owners’ Association, said that they wouldn’t even cover the maintenance costs if both the taxes were imposed.
“Out of the fixed ticket price, we would have to pay the distributors, the taxes, and cover our maintenance costs. This would not be viable.”
He added that the government should either increase the ticket rate or remove the local body tax. “In places such as Tirupur, where the labour population is high, the only entertainment is cinema,” said Mr. Baalu.
While the theatre owners said that they were losing money due to the shutdown, they also admitted that running the theatre at these tax rates would be more damaging.
Political control
Many in the film industry believe that the political establishment and the film industry must gradually be allowed to decouple.
Senthil Kumar, co-founder, Real Image Media Technologies, said: “This is a legacy issue from the days before television when government had censorship and price control of cinema. We should really have no control by the government once theatres receive statutory approvals.” He added, “Why should the price of movie tickets be controlled by the government when there are so many competing ways to receive movie entertainment today, including television, cable, DTH and internet on mobile, computer and through television? We need regulations to reflect the changes in society and the less control by the government, the better.”
(W ith inputs from R. Vimal Kumar in Tirupur, M. Soundariya Preetha in Coimbatore, R. Rajaram in Tiruchi, S Prasad in Puducherry and Pon Vasanth Arunachalam in Madurai)
