Madhya Pradesh reels under losses post theatre shutdown2 min read . Updated: 30 Oct 2018, 11:35 AM IST
Theatres in Madhya Pradesh were shut to protest the imposition of 15% local tax in addition to the 28% GST, saying that it wasn't just unviable to run exhibition business this way but also defeating the entire purpose of one nation, one tax
New Delhi: The fate of over 350 cinemas remains undecided in Madhya Pradesh, as film lovers have been deprived of new movie releases for over three weeks now. Earlier this month, theatres in the state downed shutters to protest the imposition of 15% local tax in addition to the 28% Goods and Services Tax (GST), saying that it wasn’t just unviable to run exhibition business this way but also defeating the entire purpose of “one nation, one tax." Trade experts say the exhibition sector in MP has incurred losses of nearly ₹ 15 crore thanks to the shutdown.
“It essentially means that if a ticket costs Rs. 200, about Rs. 95 goes to the government. The remaining Rs. 105 has to be divided between producers, distributors and exhibitors," explained Atul Mohan, editor of trade magazine Complete Cinema.
Each theatre property in the state has lost out on at least two successful films, Ayushmann Khurrana-starrers Andhadhun and Badhaai Ho, which themselves could have made 3.5-4% more in box office earnings had they been showcased in MP.
“Plus, MP is a hub of single screens so some films that didn’t find takers in metros might possibly have been liked by audiences in small towns there," Mohan said, citing the example of Govinda-starrer Fryday that released earlier this month to an abysmal response and made ₹ 1.52 crore at the box office.
While there have been no new releases, theatres in MP have had to carry out basic functional expenses, including electricity, maintenance and staff salaries.
“It’s been a great struggle, our business has come to a halt for a month now," said Raju Taigar of Piyush Pictures in Indore who has incurred losses paying for labour and power, without any new movies to showcase. Taigar is praying for a resolution before the big Diwali weekend, popularly considered the most lucrative movie release period in India.
Meanwhile, some other single screen theatres in Madhya Pradesh have taken to showcasing dubbed versions of south Indian films, ACP Shiva (Motta Shiva Ketta Shiva in Tamil) and Telugu action drama Janatha Garage, to name a few. But attendance for these has been negligible.
Several single screen owners and members of the industry feel the shutdown was mainly an initiative of multiplex chains in the country who do not want their giant share in box office collections to get impacted. In the first week of a movie’s run, the share is divided equally between the distributor and exhibitor, while in the second week, there is 60:40 divide in favour of the exhibitor, which changes to 70:30 in the third week.
“The Multiplex Association of India and the producers’ guild have together decided to protest against this taxation that we feel hurts business and makes it unviable to run cinemas," said Kamal Gianchandani, chief executive officer, PVR Pictures, on behalf of the multiplex association. All cinemas were informed of the shutdown initiative and the decision ultimately left to each individual member, Gianchandani added.
Gianchandani said an appeal to MP chief minister Shivraj Singh Chouhan has been made and a response is awaited. While some parties feel there is there is unlikely to be any progress on the issue till MP goes to polls on 28 November, others are a little more hopeful.
“The logic against high taxation is quite simple but we don’t count before the government," said Abhishek Singh, owner of Delite Cinemas in Gwalior.