The Multiplex Association of India has indicated that it would continue to protest against the double taxation on cinemas tickets in Tamil Nadu and wants the local body tax to be completely scrapped. The association has also sought for a meeting with the State government officials to discuss the issue. A handful of multiplexes in the State, including PVR Cinemas and Inox Leisure Limited, have downed shutters since October 3.
Last week, the State government had levied a 15% local body entertainment tax for non-Tamil films in addition to the 18-28% Goods and Services Tax (GST). The State had earlier fixed the local body tax for non-Tamil films at 20% and brought it down by 5% following requests from the film fraternity in Tamil Nadu. For English and other foreign movies, the tax slab was fixed at 20%.
“By having double taxation, the principles of GST have been compromised,” Deepak Asher, president of Multiplex Association of India, said. “This is unacceptable from consumer and commercial perspective. If consumers are forced to pay more, footfalls would gradually dwindle. We have requested for a meeting with the State government officials regarding this,” he said.
Mr. Asher also said that the National Association of Producers and Distributors will not release any content in the Tamil Nadu market if this trend continues.
Each multiplex property that was closed since October 3 has incurred an estimated loss of ₹6 lakh per day (average ball-park figure observed from the performance in this financial year). Besides this, the State government is losing out on tax revenue from multiplexes which have halted operations.
A few multiplexes which are operational said that they would continue functioning as long as they get content from non-Tamil film-makers. “We have no issues and we will continue with the shows. If we get content, we are ready to release it,” said the finance head of a multiplex in Chennai.
The KPMG India-FICCI, Indian Media and Entertainment Industry Report 2017, pegs the number of screens in India at 8,500 by the end of 2016, with multiplexes accounting for 2,500 screens.