Popcorn time: TN cuts entertainment tax on Tamil films to 8% from 10%

There is some cheer for the Tamil Nadu film industry as the state government has reduced entertainment tax from 10 percent to 8 percent on Tamil films. This means that cinegoers will have to pay 8 percent local body entertainment tax (LBET) in addition to 18 percent Goods and Services Tax for movie tickets below Rs 100 and 28 percent tax for tickets above Rs 100. Remember, LBET is levied over and above GST.

However, there is no respite for other language films in the state. The tax structure remains the same for non-Tamil films. So, for a Hindi or a Malayalam film, viewers will have to shell out 18 percent GST + 20 percent LBET and 28 percent GST+ 20 percent LBET.

Film trade analyst Ramesh Bala tweeted the calculation for the revised taxes. The break-up comes to Multiplex: Rs 150 + 28 percent GST + Rs 42 + 8 percent ET + Rs12 = Rs 204

Non-Plex AC: Rs 100 + (28 + 8 percent) = Rs 136

Non-AC: Rs 80 + Rs 14.40 + Rs 6.40 = 100.80

Many theatre owners had shut shop post the announcement of the dual tax and also stopped the release of new films. No new films have hit the state’s theatres but now the President of Nadigar Sangam, officially known as the South Indian Artistes' Association (SIAA), has said that Mersal, touted as one of the biggest films in the South Indian film industry, will be released in Tamil Nadu theatres. If the no new release stand would not have been taken back by the exhibitors then Mersal would have been the biggest loser at the box office.

The theatre owners, to battle the impasse, had also come up with new rules. The new rules, which were announced officially on Friday, include no charges for parking and online booking.

The list also mentions-

Parking charges must not be levied

Additional charges for online booking must be removed

MRP rates should be charged for food sold at theaters

‘Amma water’ must be sold at theaters

People must be allowed to bring water into the theaters

At a time when Hindi films are not having a strong run at the box office, additional burden of dual taxes can dampen the mood further. But, regional films can save the day.

In conversation with Moneycontrol, Rahul Puri, MD of Mukta Arts said, “Regional films have been doing well for a good period now. There is little doubt that as people are put off from Hindi films they are seeking solace in regional films. Telugu is having a bumper year and other regional industries are also seeing a good year. Whether this can compensate for the losses incurred from Hindi is yet to be seen.”

However, dual taxes still remain a debatable issue as the film council had claimed that levy of two taxes is an extra burden on them. Adding to this Puri said, “GST is supposed to be the only taxation on goods and services. Why should films face the burden of additional taxes? As it is, the tax burden of 28 percent is excessive in my opinion; why should it further rise on films and affect the business?”