GST to affect film industry badly

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HYDERABAD: The South Indian Film Chamber of Commerce (SIFCC) will make a representation to the Union finance ministry on how GST would adversely affect the film industry. The film chamber has taken the opinion of tax consultants on the issue and will present the same before the Union finance ministry soon.

“As it is, the film industry is not doing well, and the GST will deal a deadly blow to it. We want to avert a crisis in the industry,” said C Kalyan, president of SIFCC. Kalyan is also president of AP Film Chamber of Commerce and vice-president of Film Federation of India.

Though there is no entertainment tax on local language films in Tamil Nadu and Karnataka, both states will now have to impose GST because of the new decision of the Centre. In Kerala, however, entertainment tax of 25 per cent is levied per ticket.

Andhra Pradesh and Telangana have an entertainment tax of seven per cent for small films and 14 per cent for big films. If 22 per cent of GST is imposed, the industry will have to shell out more money towards tax. Moreover, there is no tax in panchayats of AP and Telangana, but now theatres in villages will also have to start paying GST.
“There is hardly any money flowing into film industry now. Some new producers are coming up with projects, which is actually keeping the film industry alive. Due to high taxation, even these people might shy away fearing losses,” Kalyan said.
The SIFCC is specifically asking the Centre to exempt it from the GST. In the event that the finance ministry does not agree to this, the film industry is of the opinion that the tax should be collected from audience. The audience would then have to pay ticket rate, plus GST. As of now, entertainment tax is included in the ticket price itself.
Since entertainment tax will be scrapped after GST is introduced, the film industry is pointing out how GST would affect films in the south. Bollywood and Hollywood films, however, will stand to gain as in most states, the entertainment tax on non-local films is high. In AP and Telangana it is 24 per cent. If GST is introduced, non-local films will be benefited as the GST will be less than the entertainment tax slab now.
Source: http://timesofindia.indiatimes.com/city/hyderabad/gst-to-affect-film-industry-badly/articleshow/54438064.cms

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