People of Tamil Nadu love watching movies. It is one of the reasons why Tamil films are one of the highest grossing films in India. The government too has cashed in on the movie-watching craze as it is one of the highest revenue generators of the state.
However, movie aficionados are in for a rude shock as the Tamil Nadu Film Producers’ Council has decided to hold off new releases this festive season. This is to protest against the Tamil Nadu government’s decision to impose an additional local body tax of 20 percent and 10 percent on non-Tamil films and Tamil films, respectively.
The taxes will be levied over and above the 28% tax levied under GST.
The members of Multiplex Association of India (MAI) too decided to go on strike starting October 3.
Under the erstwhile indirect taxes regime, state governments were levying an entertainment tax on exhibition of films in cinema theatres and multiplexes. With the advent of GST, entertainment tax levied by the state was subsumed in GST, and hence, the governments have stopped charging entertainment tax on cinema tickets, since these were subject to GST.
However, Tamil Nadu has empowered local bodies within the state to start levying entertainment tax, in addition to GST.
Deepak Asher, President of the Multiplex Association of India, said, "We most humbly appeal to the Honorable Chief Minister of Tamil Nadu, Edappadi K Palaniswami and the Commissioner of Greater Chennai Corporation D Karthigeyan to kindly consider our request favorably and withdraw the LBET levied on the film exhibition industry in Chennai immediately," reported Economic Times.
Theatres in Tamil Nadu had protested even earlier against local body tax by shutting down the cinema halls across the state after the Centre’s Goods and Services Tax (GST) regime came into effect on July 1.
The theater owners budged after being assured that the government will look into their demands.
However, the government allowed local bodies to collect taxes over and above the GST.
While all other states in South India have exempted their respective film industries from the local body tax, Tamil Nadu is the only state that prefers to impose double taxation over 28 percent GST on the film trade.