After fighting for the reduction of local tax imposed on Tamil and other regional films in Tamil Nadu when GST was announced, a few multiplexes in Chennai, including PVR Cinemas and INOX will remain closed on Tuesday, October 3.
This shutdown is to protest the local taxes which the theater owners allege will wipe away their margins and also would kill the film industry.
The initial local tax was 30% which has been reduced to 10% for new Tamil films and 7% for old Tamil films. New films in other languages are being charged at 20% and old films at 14%. These taxes are over and this practice started from September 27.
The Hindu quoted Kailash B Gupta, Chief Financial Officer, Inox Leisure Ltd saying, “We are shutting down for a day. We will wait and see what happens.” He did not give a time frame on how long the screens will be down. Inox has nine screens in Chennai with a total seating capacity of 2,200.
PVR Cinemas refused to comment, but their website did not allow bookings for Tuesday. No bookings were taken over phone either.
This announcement by the Chennai Multiplex owners is being perceived as a huge move, as the Chennai generates a lot of revenue for the Tamil Film Industry and shutting it down for a day may invite massive loses.
Tamil Nadu has 1,127 operating public screens with a seating capacity of 6.14 lakh. Of this 407 are complexes or multiplexes, reported the Hindu.
In July, theatres pulled down their shutters and closed their counters protesting against the Tamil Nadu government’s move to impose a 30 % local body tax in addition to the 18 % - 28 % GST on movie tickets. A few days later, an eight-member committee was formed to look into the issue.
According to a KPMG India-FICCI report on the Indian Media and Entertainment Industry 2017, overall, 90% of the total Tamil language domestic box office collection was contributed by the Tamil Nadu market, of which 70% came from Tier I cities such as Chennai, Coimbatore, Madurai and 20% from Tier II and III towns.
Closing of multiplexes can result in major revenue loss to the businesses as well as the government.