GST: Marathi film industry opposes 28 percent tax; may go on strike unless it's brought down

FP Staff

Jun,07 2017 12:16 30 IST

The newly proposed Goods and Services Tax (GST) rolled out by finance minister Arun Jaitley has not been well-received by film industries across India (with the exception of Bollywood). GST — a slab of 28 percent has been levied on the film industry — is scheduled to be implemented from 1 July 2017.

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Screengrab from the website.

In the wake of opposition from regional film industries, there is a probability that the Marathi film industry might go on strike, as per a report by Times of India. Cinema owners in the state at least, are contemplating that move.

Speaking to the newspaper, Deepak Kudale, former president of the Cinema Owners and Exhibitors Association of India, said, "People come to single screens because of low ticket prices. Right now, the entertainment tax in the city is 40 per cent. GST will bring it down to 28 per cent, while Marathi films are tax-free. Now here's the twist: A 12 per cent decrease (on Hindi films) will spell doom for us because we won't be able to recover the maintenance cost of the theatres and a 28 per cent rise (for Marathi films) means the viewer will think twice before buying a ticket here. Either way, we will be at the receiving end. So, instead of running into losses, it is better to shut shop and go on a strike."

Down south, the film industries have already voiced their opinions with stalwarts like Rajinikanth and Kamal Haasan slated to articulate the concerns of the protesting fraternity. In a report, Firstpost quoted South Indian Film Chamber of Commerce (SIFCC) president L Suresh as saying that the current tax rate on films in south India is low anyway; in some cases it is almost free. With implementation of GST, tax will shoot up and will "hit the south Indian cinema badly".

In Maharashtra, small-budget films have been able to do well. The major reason behind their success is credited to low-budget, good content and low-taxes (some even get tax-free status). Recently, with films like Sairat (2016), Katyar Kaljat Ghusali (2015) and Lai Bhaari (2014) the regional cinema box-office was able to create a pan-India presence. But the number of such films is very low per year.

According to a report by DNA, the representatives of the film industry met Union Minister Venkiah Naidu who also chairs the Ministry of Information and Broadcasting, to reduce the proposed GST in film sector from 28 per cent to 18 per cent. They have reportedly asked the minister to provide support and help the industry to increase the number of screens in the country.

In the same meeting, Maharashtra Chief Minister Devendra Fadnavis was also present. Other attendees included Ajay Mittal, secretary, Information and Broadcasting, film industry veterans, representatives of film producers guild and others. The minister assured that the demands of the film industry would be considered and definite efforts would be taken in  "all scope and ambit" to boost the growth of the industry, reports DNA.

In the coming days, the picture around the GST implementation across the Indian film industry is expected to get clearer.