Entertainment tax: KFCC comes out against Corp’s move

KOCHI: The Kochi Corporation’s move to approach the state government seeking to reinstate the right of urban local bodies to collect entertainment and advertisement taxes seems to have kicked up a controversy with the Kerala Film Chamber of Commerce (KFCC) coming out against the move. It was following the GST implementation the urban local bodies lost this crucial avenue for revenue collection.

According to the members of the KFCC, the civic bodies’ move to collect entertainment tax will put the film industry in deep crisis. “With the GST coming into force, we are levying 18 per cent tax on tickets priced less than `100 and 28 per cent on tickets above `100. It was 15 per cent, 20 per cent and 25 per cent in panchayat, municipalities and Corporation limits respectively before the implementation of the GST. If the government permits the local bodies to collect the tax, we will be forced to pay GST as well as the local body tax. This will further annihilate the film industry,” Appachan, KFCC general secretary, told reporters here on Wednesday.

Two days ago, Mayor Soumini Jain had approached the state government citing Tamil Nadu and Gujarat are directly collecting entertainment tax as per Local Authorities Entertainment Tax Act. The letter also reads, the implementation of GST has put the urban local bodies in the state in an unprecedented financial crisis due to the loss of a major source of revenue.

“While the GST is aimed at bringing a single taxation policy, the new move will bring a double taxation policy. If the government lets the local body to collect the tax, the film industry will come to be a standstill. Do we have to make the movies only for paying the taxes?” said Siyad Koker, Distributors Association president. According to Vijaya Kumar K, Chamber president, the film industry in Tamil Nadu is on the verge of extinction as they are forced to pay the GST and the local body taxes.

“Last year, the Kochi Corporation had collected `13.5 crore as entertainment tax. This will be doubled if the local body gets the right to collect the entertainment tax. The government should take this matter seriously,” he said.

However, the city corporation is of the view the GST system has some ‘contradictions’. “As per the 101st amendment of the Constitution, entry number 62 of 7th Schedule permits levy and collection of entertainment tax by local bodies. Moreover, we are facing a great loss in the form of advertisement tax as we have no right to collect it,” the Mayor said.