Ending several months of uncertainty in the Tamil film industry ever since GST was rolled out, the Tamil Nadu government has determined that a 10% tax for new Tamil films over and above the GST and 7% for old Tamil films will be charged. New films released in other languages will be taxed at 20% while old movies will fall under a 14% tax bracket.
The levy of local body tax on films will come into effect from September 27 for theatres located within the limits of Greater Chennai Corporation.
According to the order issued by the Revenue Department, the tax will be collected based on GST returns filed by the proprietor before the Commercial Taxes department. The order also indicated that the system of stamping tickets is to be done away with, to ensure hassle-free remittance. A senior government official clarified this tax will be within the ₹ 120 per ticket cap. He also said that Chennai Corporation has identified 168 theatres within city limits and each of them will have to file tax returns every month.
In July, theatres pulled down their shutters and closed their counters protesting against the Tamil Nadu government’s move to impose a 30 % local body tax in addition to the 18 % - 28 % GST on movie tickets. A few days later, an eight-member committee was formed to look into the issue.
As soon as the order copy was circulated through social media, members of the Tamil film industry, including producers and theatre owners, expressed concern that this move would further harm an industry struggling after the levy of GST. The film fraternity has decided to meet beginning next week to discuss this issue with all stakeholders involved.
“This is a serious concern and the industry cannot survive with an additional tax being imposed,” lamented Actor Vishal, general secretary of Nadigar Sangam and president of Tamil Film Producers' Council, who has been fighting on behalf of the film industry on the issue. He questioned why Tamil Nadu government had to levy a local body tax when the Prime Minister himself has clearly indicated that going forward it would be ‘One Nation One Tax.’ “We had placed several other requests including flexi pricing and there is no mention about any of those issues. We will call for a meeting with other players in the industry beginning next week,” he added.
Abirami Ramanathan, President, Tamil Nadu Cinema Theatre Owners’ Federation, said that all stakeholders in Chennai region would meet on Wednesday and give a joint reaction.
Several theatre owners with whom The Hindu spoke said that the State government has issued this order strategically during a long weekend to dilute the reaction time. When asked whether theatres will go for another round of protest/strike, the industry stakeholders said that the festive season is around and it will disrupt release of new films. “We don’t want to disrupt new releases by bringing curtains down. Why should we pay another tax apart from GST – this is unfair,” said one of the theatre owners who requested anonymity. But they all unanimously said that they will make another round of representation to the State government after the meeting next week.
Udeep B., Managing Director of Mayajaal, said, “Double taxation is not good for any industry. The additional levy of tax in addition to GST will be very hard on the Tamil film industry which is already reeling under a 10-year-old ticket cap issue.” He added that the need of the hour was a flexible ticketing mechanism to accommodate all types of content (big and small) on all days (weekdays and weekends).
Ruban Mathivanan, Managing Director of GK cinemas agreed with this point of view and added: “This tax is an additional burden which the industry can’t take,” he said.
“The move will destroy the industry. We will protest the move and work with other stakeholders on this issue. Also there is no clarity on ticket pricing including the local body taxes,” Kailash B Gupta, Chief Financial Officer, Inox Leisure Ltd, said.
Theatre owners are also worried that they cannot add any further burden on the consumers. “If we do so they will stay away from theatres. Piracy is already keeping them away from us,” said the chief financial officer of a multiplex.
Online ticketing firms were also concerned about the implications of the order. “The government has not touched upon increasing ticket prices and flexi pricing. This would impact the industry as we were hoping for a zero local body tax on Tamil films,” said Ramkumar Nammalvar, founder and CEO of TicketNew.
Tamil Nadu has 1,127 operating public screens with a seating capacity of 6.14 lakh. Of this 407 are complexes or multiplexes.
During weekends (Friday, Saturday and Sunday) the occupancy levels at these screens are 100 % (except during crisis, natural calamities etc). On weekdays, the occupancy levels are between 70-80 %.
(with inputs from Aloysius Xavier Lopez)
