Chennai: The Tamil Nadu Film Producers Council has decided not to release any films from Friday to protest against the 10% local body entertainment tax on top of the 28% goods and services tax (GST).
The film industry which is reeling under the 28% GST on movies and issues of piracy, claimed that the additional 10% entertainment tax levied by the Tamil Nadu state government would be an additional burden.
In a statement released on Tuesday evening, the council said that the government hasn’t streamlined the ticket pricing over the years. The Tamil film industry has been discussing the issue with the state government and criticized the lack of clarity surrounding the local body tax during the roll out of GST, two months ago. After several rounds of negotiation, finance minister D. Jayakumar had then promised to resolve the issue.
However, last week, the Greater Chennai Corporation’s Revenue Department issued an order levying entertainment tax on new and old Tamil movies at 10% and 7%, respectively. While new films in other languages will have to pay a 20% tax, old ones will be charged 14% tax.
The 20% tax on other languages means, it is not just the Tamil movies that are affected, but the impact is on the industry as a whole, said film producer and writer Dhananjayan Govind.
The members of Multiplexes Association of India (MAI) decided to shut shop of multiplexes in Chennai including the PVR and INOX against the double taxation for a second day on Wednesday.
The industry experts in Tamil Nadu said that the state government’s decision is against the “One Nation, One Tax" principle of GST and will push the industry into deeper crisis.
For example, a Hindi or a Malayalam film will have to pay more than 50% tax in Tamil Nadu as per the government’s double taxation method, said Govind.
While some of the state governments in the country have authorised local bodies to levy entertainment tax, none have implemented it, except the Greater Chennai Corporation.
Govind also said, “The biggest problem in Tamil Nadu is that the state government always wants to have a say in running the film industry. No other state has such a close link with its film industry like the one in Tamil Nadu."