Kollywood's in crisis, with its films failing, GST looming, and political instability in Tamil Nadu
The Tamil film industry — colloquially known as Kollywood — is facing a crisis.
Too many films are releasing. Too many films are failing at the box office.
Audience interest in watching movies in theatres is on the downswing.
The lone summer blockbuster is Baahubali 2: The Conclusion; while the horror thriller Sangili Bungili Kadhava Thorae can be termed as a hit.
Meanwhile, Tamil film producers are trying to get their films released before 1 July 2017, which is when the newly approved Goods and Services Tax (GST) comes into effect. As it is, the film industry is not doing well, and GST will deal it a body blow. There’s no longer a single buyer for films in Tamil Nadu; instead, there are individual, local distributors who deal only in cash and do not give a minimum guarantee or an advance. And GST will be uniform across the state — from panchayat single screens to metro city multiplexes — all of whom will be charging the same 28 percent.
The biggest blow for Tamil films with Tamil titles and U ratings from the Central Board of Film Certification is that they will not be able to avail of the tax free status that was hitherto granted them by the state government. This has led to a situation where producers are rushing to get their film before the 1 July deadline, in order to claim the existing benefits.
Kamal Haasan is the only big Kollywood star who's come out strongly against GST. Speaking at the South Indian Film Chamber Of Commerce, Kamal pointed out: “Regional cinema is the strength and pride of Indian cinema. This diversity is the reason why this country is strong. That diversity has to be maintained and you cannot pressurise that [sic]. The tax rates have to be brought down to 12-15 percent from 28 percent. I’m a prompt tax payer, but at this rate — I will be forced to quit the industry. We should remember that this is not the East India Company.”
Kamal's daring statement stirred a hornets’ nest. Union finance minister Arun Jaitley hit back and asked celebrities not to use the press to pressurise the government to lower the film industry's 28 percent tax slab under GST. Jaitley said, "Using the media as propaganda to pressurise the government is not going to work." The actor responded with a tweet: “Not pressurising. It's a plea and SOS from regional cinema to our FM. We fear it will collapse. We request the council to do all to save it.”
Meanwhile, Tamil film industry associations have no clue what the Tamil Nadu government’s viewpoint on GST and its implication is. Chief Minister E Palaniswami is fighting a fierce battle for his government’s survival as the ruling AIADMK is now virtually split into three groups. The Assembly is meeting for the monsoon session soon, and each group is garnering support and has no time for Kollywood.
In neighbouring Kerala, the Pinarayi Vijayan government’s finance minister Thomas Issac has said that the state government will do away with entertainment tax for cinema, once the GST regime comes into force. He made it clear that now local bodies who are levying taxes will be compensated and there will not be double taxation.
However, the Tamil Nadu government — due to the current political instability — has no time to sort out the basic issues plaguing the industry. For the first time in 50 years, Kollywood feels orphaned as there is no strong leader from the film fraternity. The entire industry feels if Jayalalithaa was alive or Karunanidhi was active, such a situation would not have come to pass.