CHENNAI: Tamil Nadu Finance Minister D Jayakumar said on Saturday that Chief Minister Edappadi K Palaniswamy will decide on whether to exempt or levy 30 per cent entertainment tax along with Goods and Services Tax on cinema theatres in the State.
This comes after Tamil Nadu Theatre Owners Association decided to stop screening movies to protest against the dual taxation under GST regime from Monday.The GST Council has fixed the tax rate for movie tickets under two categories – 28 per cent for tickets costing over Rs 100 and 18 per cent for tickets priced below Rs 100.
Added to it, is a levy of 30 per cent entertainment tax by the State government. Theatre owners feel the industry will not be able to survive such a taxation of 58 per cent. But the State government feels the levy of entertainment tax is to help provide revenue to local bodies where the films are screened.
It is learnt the Finance Minister held a meeting with theatre owners on Saturday. It appears theatre owners are positive of resolving the issue.
Tamil Nadu Theatre Owners’ Association president Abirami Ramanathan told Express, “We will be holding a meeting with theatre owners across the State from Chennai to Kanniyakumari on 11.30 am on July 2. A decision will be taken in this regard by 12.30pm and we will convey it to media,” he added.
As per the economics of a cinema theatre, if a ticket is priced at Rs 100 and above, theatres will have to pay Rs 58 as local body tax and GST. The theatres collect Rs one per ticket as maintenance charge. Out of the remaining Rs 41, a total of 70 per cent will be paid either to the distributor or producer and the theatre owners would get a paltry profit of around Rs 12. It is grossly inadequate to run the theatre, said cinema theatre owners.