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GST effect: Here is why cinema theaters in Tamil Nadu have shut down in protest

GST effect: Here is why cinema theaters in Tamil Nadu have shut down in protest
Written by Ravleen Khera

All of us were well aware that the implementation of GST was not going to be a smooth ride for the nation and so it is. Close to 1000 theaters across the state of Tamil Nadu have remained shut for the second consecutive day on tuesday, ever since the theater owners declared an indefinite strike as a sign of protest against the state government’s decision to levy an additional 30% local body entertainment tax over and above the already applicable levy of 28% GST on movie tickets costing more than Rs.100 and 18% GST on movie tickets falling below the Rs.100 mark.

Tamil Nadu is the only state (as for now) that has imposed an additional tax rate like this, in addition to GST. If brought into practice, such double taxation methods will defeat the entire purpose of GST that is ‘One Nation One Tax’. Tamil Films Producers Council president Vishal representing the producers in the state, tried to hold talks with the Tamil Nadu Cinema Theatre Owners Federation to let go of the strike ever since they threatened on Friday to shut down. But the president of the Federation Abirami Ramanathan, went ahead on Sunday evening and announced that theaters would infact remain shut from Monday i.e. July 3 if the government failed to roll back the additional duty. Producers of newly released tamil films are crying foul since this shut down will mean heavy losses to them, if there are no theaters for their movies to be screened.

Union Finance Minister, Arun Jaitley had clearly stated that GST would subsume the earlier applicable entertainment tax and service tax. That is the whole purpose behind bringing in the ‘One Tax’ system right? Well, not really. A particular provision in the GST Act allows local bodies to levy additional taxes but this provision does not give the state government the right to levy additional taxes. Taking advantage of this loophole, the Tamil Nadu government stealthily brought in the Tamil Nadu Local Bodies Entertainment Tax Act, 2017 in place of the previously existing Tamil Nadu Entertainment Tax Act, 1939. And this means, the theater owners will have to pay these additional duties to the local bodies in the state.

Ramesh Bala, trade expert tweeted an infograph explaining how additional taxes will ruin the movie theater business in the state.

The hashtag #SaveTamilCinema has been trending on twitter since yesterday. Here are some tweets that were put out in protest of the state government’s decision.

Late last evening, actor-filmmaker Kamal Haasan issued a statement, in which he said that “filmmaking in Tamil Nadu has been made difficult deliberately.” Lets hope, better sense prevails and the movie business in the state is back on its feet again.

About the author

Ravleen Khera

A commerce graduate, yoga enthusiast ( certified power yoga instructor), internet/social media junkie, dog lover, coffee addict are some words that describe me. I endeavour to nurture a skill for penning down words that educate, engage, entertain and also add value to the platform my content is published on. Currently,amidst a career transition :)