The Goods and Services Tax (GST) regime launched on July 1 has rattled the entertainment industry in Tamil Nadu with nearly 1,000 cinema theatres downing their shutters indefinitely from Monday seeking a reduction in the tax structure.
Multiplexes in shopping malls all over Tamil Nadu too remained closed following the switch over to the GST.
“Not a single theatre in the State functioned today. Though the representatives of the Chamber called on the Chief Minister to represent their grievances, the discussions remained inconclusive,” said a spokesperson of Abirami Group, whose head Abirami Ramanathan is the president of the Tamil Nadu Film Chamber of Commerce (TFCC), the apex body controlling the exhibitors in the State.
The theatre owners in Tamil Nadu are agitated over the steep hike in tax which they have to pay in the GST regime. With the launching of the GST, tax for tickets costing
Rs 100/- has been fixed at 18 per cent while tickets in the higher slabs have to pay tax of 28 per cent.
But the GST Council had agreed that local bodies where the theatres are situated could enforce local tax over and above the GST.
According to an Ordinance issued by the Government of Tamil Nadu, the theatres have to pay 30 per cent as local body tax in addition to the GST. Besides, they have to pay 8 per cent GST on the local body tax, which means the theatre owners have to pay a total of 66 per cent tax.
“This will destroy the theatres because it is impossible to operate them with the remaining 34 per cent money. More than a million families are dependent on theatres for their livelihood,” Abirami told journalists on Monday morning.
He pointed out that neighbouring States of Kerala, Karnataka and Andra Pradesh do not have local taxes.
Office-bearers in film chamber said this is the first time cinema theatres in Tamil Nadu, once rated as the
Mecca of South Indian language films, downed their shutters indefinitely.