The show is on in Tamil Nadu, but people will have to pay more

Film shows have resumed from Friday at over 1,100 screens across Tamil Nadu, following the withdrawal of the four-day strike by theatre owners.

But they have hiked ticket prices by passing the burden of the Goods and Services Tax (GST) to the movie-goer.

The owners went on strike from 3 July in protest against the 30% entertainment tax imposed by the state government, which is to be collected by corporations and municipalities.

Coming on top of the GST's peak rate of 28%, theatre owners said that a 58% tax on a ticket of Rs 100 would make their business unviable.

The government, following representation, has agreed to put the entertainment tax on hold.

The hike

Announcing the withdrawal of the strike, Tamil Nadu Theatre Owners Association president Abirami Ramanathan told reporters that a committee from the film industry and the government would go into the issue of local entertainment tax.

Following Ramanathan’s announcement, theatre owners have hiked ticket prices — 18% for tickets below Rs 100 and 28% for those above Rs 100.

Ramadoss's scathing attack

Criticising the increase in ticket prices, Anbumani Ramadoss, the youth wing leader of the Pattali Makkal Katchi and former Union minister, said it was unacceptable. He said the owners had failed to convince the government to withdraw the local tax, which is not levied anywhere else, and had then passed the buck to movie-goers by hiking ticket prices.

“It looks as if they have struck a deal with the government,” Ramadoss said, alleging a payoff.

He pointed out that state governments elsewhere had cancelled entertainment tax after GST came into force, and that if the Tamil Nadu government alone was levying an additional 30% entertainment tax, the remedy for theatre owners would be to go to court and get relief, instead of passing the burden of double taxation to film goers.

He further asked how theatre owners could increase ticket prices when a bipartite committee has been set up, following talks between the industry representatives and the government of Tamil Nadu.

Referring to the exemption from the entertainment tax for films with Tamil titles, which has been in force since 2006, Ramadoss said theatre owners had never passed on the benefit to the cinema-goers.

Moreover, he alleged that the owners arbitrarily fixed ticket rates on the basis of the star value of a film, which was way beyond the limit fixed by the state government. Further, for online bookings, theatres were charging an extra Rs 30 to 40 per ticket.

With this being the track record of theatres, Ramadoss said, there was no way the current hike in ticket prices because of GST was justified.

Debate in the Assembly

Leader of the Opposition and DMK working president MK Stalin, who raised the issue in the state Assembly on Thursday, said states like Kerala and West Bengal had reduced the entertainment tax, and that the Tamil Nadu government should also consider a cut in the tax as it involved the livelihood of lakhs of people employed in the industry.

However, CM Edappadi Palaniswami refused a rollback, saying the government was facing a cash crunch and there was no way it could augment the revenue of equally distressed local bodies.

However, at a late meeting in the evening between representatives of the industry and Finance Minister D Jayakumar, it was decided to refer the entertainment tax issue to a committee, and pending its finding, the new tax could be kept on hold.

Case has weakened

Theatre owners say now that the GST had now been added to the ticket price, their case for withdrawal of reduction of the local entertainment tax has weakened.

Owners were incurring a loss of Rs 20 crore a day because of the closure, and had been under pressure from producers from the beginning, as their new releases were held up or just-released were caught up in the sudden strike.

To bring the strike to an end, Tamil film icons Rajinikanth and Kamal Hassan, through tweets, appealed to the government to reconsider the local tax.

This helped the government to form a committee as a face-saving measure. The theatre owners then took the easy out to end the strike by hiking the ticket prices.