Wonderla, a leading amusement park operator, has threatened to scrap its investment plans in Tamil Nadu if the government does not withdraw the 10% local body tax (LBT).
Amusement parks in the State pay a 10% LBT levied by the Tamil Nadu government over and above the 18% Goods and Services Tax (GST).
George Joseph, joint managing director, Wonderla Amusement Parks and Resorts, said: “If the LBT is not removed, we would have to shift to Sri City or some other location.”
“Our main focus is school children and we give deep discounts to encourage them to visit amusement parks. With a GST of 18% and a local body tax of 10%, running the business becomes unviable for us,” he added.
During the Global Investors Meet (GIM) 2015, Wonderla signed a memorandum of understanding in the presence of the then Chief Minister Jayalalithaa, committing to invest ₹500 crore. Land was allocated for it near Kelambakkam.
Several other amusement park owners agreed with Mr. Joseph and said that the 10% LBT had to go.
V.G.P. Ravidas, managing director of VGP Group, said that as the amusement park industry catered to children, the government should be considerate with levying LBT on it. “We have already made representations to the State government regarding this. This industry is seasonal and we get crowds in April-May and again during Pongal season. There are thousands of employees in this industry, so we urge the State government to look into this,” he added.
The other arguments cited are the large investments required as well as the hefty customs duties on the rides and equipment that go into parks. Park owners point out that the industry has not received the required support from the Centre as well as State governments.
Jose Punnoose, managing director of Kishkintha, said that the industry had fixed overheads and cannot be compared with the film industry.
“We don’t get input credit. We are not into manufacturing. We don’t buy things, we provide services. This is a capital-intensive industry and we constantly need to upgrade our facilities,” he added.
Most park owners said that they had not increased ticket prices. “If we increase the price we will not be able to attract footfalls,” said Mr. Punnoose. The managing director of another amusement park said, on condition of anonymity, that two parks in Tamil Nadu are on the verge of closing down.