Following the government's announcement to levy 30 per cent of entertainment tax over the GST rate of 28 per cent, the chamber chose to shut down theatres in protest. Tamil Nadu is the only state to have imposed an additional 30% entertainment tax over and above the GST for film trade.
Going ahead with their strike announced on Friday, the exhibitors knocked at the doors of Chief Minister K Palaniswami seeking a review of a 30 per cent Entertainment tax, charged by the city corporation, citing their "inability" to pay both taxes. "And it won't be viable to run the theaters, leading to shutting down of Cinema halls".
The new tax regime, the biggest economic reform since Independence, levies a 18 percent tax on tickets up to Rs 100 while tickets priced more than Rs 100 fall under the 28 percent bracket.
Tamil Nadu is the only state in the country that has imposed a separate tax in addition to GST, and the total tax now comes to 68%, leaving only 32% for theatre owners, who are already facing extinction in a fiercely competitive and TV-dominated cinem industry.
The strikes are likely to have a huge impact on Tamil Nadu's Kollywood, among the most popular of India's regional film industries. It may be recalled that versatile actor Kamal Haasan had earlier expressed his displeasure in unequivocal terms against the GST rates fixed for the Tamil film industry. My film has just released and this move will kill my film.
"If we screen movies, we have to pay local body taxes immediately as it came into force from yesterday".
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"Plainly speaking, the Tamil Nadu politicians are threatening us. We welcome it", Tamil Nadu Theatre Owners and Distributors Association president Abhirami Ramanathan said.
Director Shankar, whose movie Enthiran 2.0 will be released in 2018, tweeted: "48-58 per cent is too much tax".
"They announced the strike without prior notice", he said and wondered, "How will I pay back loans I took to make this film?"
Abirami Ramanathan, president of the Tamil Nadu Cinema Theater Owners Federation, told the Press Trust of India: "We welcome GST". It also warned of "stern action" against those charging rates beyond the stipulated GST.
Reacting on the double taxation by the state, Haasan said in a statement: "Filmmaking has been made hard deliberately".
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