GST: Tamil film industry opposes local body tax; state government in no mood to relent

Sreedhar Pillai

Jul,03 2017 10:25 07 IST

Nearly 1060 odd screens of cinema theatres across Tamil Nadu have shut down from 3 July to protest against the “double taxation” imposed by the state government. Over and above GST, the Tamil Nadu government has imposed a 30 percent local body tax. This means that a Rs 100 ticket will have 18 percent GST, and for tickets above Rs 100, the GST will go up to 28 percent, plus 30 percent as local taxes.

Abirami Ramanathan, president of Tamil Nadu Film Chamber of Commerce and chief of Tamil Nadu Theatre Owners Association said, “It is shocking that the 'One nation, one tax' GST has been passed by the central government, and here, we have a state government which is doing [implementing] double taxation! This means we end up paying 48 to nearly 60 percent as tax, depending on the ticket pricing. In all other neighbouring states of Andhra Pradesh, Kerala and Karnataka, there is only GST and the governments of these states have abolished local taxes.” However, there is a clause in the GST draft bill which states if they want, state governments can charge additional local body taxes on cinema tickets.

Warnors_Theatre_-_A_good_crowd_to_see_a_classic_movie_with_pipe_organ_concert_starts_filling_seats_-_2014-10-16 - Copy (2)

Representational image from Wikimedia Commons

The trade is also peeved that the Edappadi Palaniswami government in the state kept them in the dark regarding the new tax till the last moment. In fact, the Tamil Nadu government issued a government order on the additional tax a few hours before Prime Minister Modi’s historic announcement on GST in Parliament. Ramanathan also made it clear that theatres in Tamil Nadu were not against GST, but rather the additional taxes. “We want a level playing field and do honest business and pay GST, but we are against the additional 30 percent tax by state government, which is sudden and unprecedented.”

Cinema ticket rates in Tamil Nadu have not been raised for the last 10 years and there is a cap on ticket rates. In the past, a High Court order has asked the state government to increase ticket prices, but it has not been implemented. The demand made by the film trade is that the increase in ticket rates should be officially ratified by the state government, and the 30 percent local body taxes should be scrapped.

But the state government is in no mood to relent, as they feel that their control over the film industry would be lost with the implementation of GST. In a state which has produced five chief ministers from the Tamil film industry, previous governments were always cautious when dealing with it. After Jayalalithaa’s demise, the importance given to the film industry by state ministers and politicians has diminished. Top director Shankar, whose big budget sci-f thriller 2.0 starring Rajinikanth is releasing in January 2018, tweeted in frustration: “48-58%.. too much tax.. save Tamil cinema”

Meanwhile, seven films which released on 30 June, ended their run in three days. Ivan Thanthiran, the Gautham Karthik-RJ Balaji comedy riot which carried good reports, suffered the most after it was taken off the screens. One of the producers and distributors of the film G Dhananjayan tweeted: “We can only give a good film. Beyond that what can be done when the whole system is collapsing. Deeply disturbed, until the situation is resolved, we appeal to people of TN not to watch #IvanThanthiran in Online/Pirated DVDs. Pl. encourage good cinema.” The director of the film Kannan made a tearful appeal to the industry to save the film, but by Sunday morning, pirated DVDs of the film had flooded the market.

The next few days are going to be crucial for Kollywood. The Tamil Film Producers Council and Nadigar Sangam chief actor Vishal have met the concerned state government ministers. He says a solution will be found in a day or two. MK Stalin, the powerful opposition leader and DMK strongman is likely to take up the tax issue in the state assembly today. Till then, it is curtains for cinema in the state.