GST Hits A Terrible Tax On Tollywood Industry

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Kolkata: Will prices of cinema tickets change in Bengal once the nation opts for the ‘one tax, one nation’ concept? The GST Council has opted for the highest slab of 28% on cinema tickets. That has raised doubts over its impact on the pricing of Bengali movie tickets.

In Bengal, the Eastern India Motion Pictures Association (EIMPA) and Federation of Cine Technicians and Workers of Eastern India have called a meeting at the Technicians’ Studio on June 10. If the proposed tax on regional cinema — a whopping 28% — is not slashed, they will go on a strike, claimed many.

If GST implemented tax from July 1, which will cost the Tollywood industry 14 times more. Presently service tax on the films is 2% at the moment. At this time losses of Tollywood runs in crores. Krishna Daga said that chairman, producers’ section, EIMPA, “If we are made to pay the proposed rate, we will stop work in Tollywood. No one will be able to do any business.

Every year, Tollywood makes a loss of `100 crores and to sustain in this industry, one should be lauded. While there’s no recognition of that, the Centre is trying to put additional burden on us. Apart from producers, distributors and exhibitors, even artistes will be affected. Cinema is a tool to inform people and create awareness; it’s a great educational medium. Why then should we be under the same tax slab as the liquor industry and gambling? We are grateful to the state government for standing by us and though we aren’t making a threat, if the situation remains the same, we will go on a strike.”

While a handful of city theatres take rent for exhibiting films, in the suburbs most share the revenue with producers and distributors. Parthasarathi Daw, owner of Udayan Cinema, Seoraphuli, said the proposed rate will be the final nail in the coffin.

Baba Yadav whose Boss 2 starring Jeet will release this Eid, is wary of the impact of GST. There is only very few theatres in Bengal and recovery is limited. On top of that, if they are made to pay a huge amount as tax, what will they earn? Director Rhitobrata Bhattacharya, who will be present at the June 10 meeting, said, “Tollywood is never given an industry status. If it had, banks would be giving us loans to make films. Why should we be compared to other industries then? We should all stand up and protest against such a farcical rate proposed by the Centre.”

The director apprehends a grim scenario ahead for Tollywood. He said that, “A lot has been talked about and discussed about the precarious business scenario of Bengali films. Unfortunately, this new tax with its concomitant effect on ticket price increase will be another handicap for the industry. I hope that the mandarins at the helm of business affairs for Bengali films and the government work in tandem to see how the negative impact can be mitigated. This actually can be quite devastating for our industry.”

One way of recovering this extra tax burden is to increase the ticket prices of Bengali movies. However, producer Mahendra Soni reminds that footfalls will dip if ticket prices increase. Soni said that, “When producers’ share falls, it will result in them cutting on budgets of subsequent films. Till now, multiplexes used to enjoy a subsidy. This is a state subject. But with GST, we aren’t clear if it will remain this way.”

Dutta said that, Arijit Dutta, the owner of Priya, has variable rental charges. He charges Rs 2.35 lakh for seven days of screening at a 4.30 pm or 7 pm show. For a 2.30 pm and 3.20 pm show, the weekly charge is Rs 2.20 lakh. For a noon or night show, the weekly charge is Rs 1.25 lakh. “For a 4.30 pm or 7 pm show, a producer can earn approximately Rs 4.5 lakh weekly from seven houseful shows. I get a rental of Rs 2.35 lakh for this period. With GST, I’ll continue to get Rs 2.35 lakh. But the distributor will get approximately Rs 4 lakh,”