Theatre owners across Tamil Nadu and Pondicherry have decided to stop screening films from Monday, July 3, 2017. They claim that there is a ‘lack of clarity’ over ticket prices under Goods and Services Tax (GST) regime.

The theatre owners are unhappy with the State imposing 30% local body tax. The Goods and Services Tax Council has fixed the tax rate for movie tickets under two categories; 18% for tickets less than Rs 100 and 28% for tickets priced over Rs 100.

Currently, the prices of tickets in the state are capped at Rs 50 for single screen theatres and Rs 120 for multiplexes. The price of the multiplex ticket is inclusive of 30% entertainment tax and 1% admission fee.

According to a report by The Hindu, President of Tamil Nadu Theatre Owners and Distributors Association, Abirami Ramanathan, said, “The Tamil Nadu government has issued an ordinance which states that the theatres have to pay a 30% tax to the local body. This is in addition to the GST rates, and on each local body tax, we have to pay an additional 8% GST. So the total tax rate is 66% in Tamil Nadu. For a Rs 100 ticket, we will be paying almost Rs 66 as tax, which is unviable.”

He asked for the withdrawal of the local body tax saying that Kerala has done the same.

The Tamil Nadu government has not specified if it would levy entertainment tax above the GST rate levied. This has caused further confusion about the ticket prices. The theatres will run films on July 1 and July 2 but will remain shut from July 3 until the government clarifies its stand on ticket prices.