GST seems to be not sparing anyone. And the worst to get hit by GST implementation is the South regional cinema industry. While Tamil cinema came under a tax bracket of 12% maximum, now the state films will be seen somewhere between 18-28% slab based on the ticket prices. This comes in as a huge blow to the movie makers.
This change, post GST's arrival might as well prompt theatre owners to hike ticket price which in turn will affect audience who would be required to shell out some extra bucks.
Adding some salt to the wound comes in a new shocker by the State government. The State government has decided to levy an additional tax of 30% which is named as the municipal tax. This has come in as a shocker to film-makers across the state and to theatre owners, where the latter have decided to stage protest against the State government.
Though both film-makers and theatre owners are okay with the GST rule, they, however, are not convinced with the State government's new tax rule as they fear that the business of cinema will witness a steep decline.
The theatre owners association have decided to shut down all theatres and its operations and no screening of movies will be facilitated unless the State government intervenes and resolves the issue amicably.
If municipal tax too, is seen being levied then the ticket prices would be set to somewhere between Rs 180-200 as against the current standard rate of Rs 120. This would encourage the piracy factor in the state which is already seen as a humongous threat.
Pirated copies of new releases get released on the same day on the internet and many movies have been affected in terms of business.
Ace director S.Shankar, who is busy with his post production work for the upcoming magnum opus movie, 2.O, has raised his concerns over the growing tax and has requested to save Tamil cinema.
Shankar, though has voiced out his opinion in general, is said to be affected on a larger scale in particular as the Rajinikanth starrer movie is touted to be the biggest Indian movie in terms of production values.
Being made at a mammoth budget of 400 Cr, the movie needs to click big time with massive theatrical revenue, which might seem like a daunting task if the state government's tax rule is implemented.
The ace director has expressed his concern by stating that, a total tax rate of 48-58% is too huge and unbearable.
This would only mean that the distributors and theatre owners will be required to share a meagre revenue of 42-52% between themselves which will impact the business of Tamil cinema to a larger extent.