BENGALURU: Kannada movie producers have urged the state government to come up with a tax policy to protect the regional film industry from the impending goods and services tax (GST) regime.
The demand comes ahead of the Budget session. Officials in the finance department said chief minister Siddaramaiah, who holds the finance portfolio, will start pre-budget meetings on Thursday. Siddaramaiah is expected to present the Budget for 2017-18 in the assembly on March 10.
“It is time the chief minister considered an exclusive tax policy for the regional film industry, including Kannada, Tulu, Kodava and Konkani films. Without such a policy, it would be difficult for regional movies to compete with other language films in the GST regime,” said Sa Ra Govindu, president of Karnataka Film Chamber of Commerce (KFCC). Govindu said a delegation would meet Siddaramaiah in a couple of days.
Kannada films currently do not pay tax. Under the GST regime due from July 1, they are expected to be taxed at 18%. GST is likely to benefit other language films in Karnataka since the tax burden would come down from the present 32% to 18% under a unified tax regime.
“Kannada films can never compete with Hindi, Tamil and Telugu films as the markets are larger. We cannot match them in terms of investment and returns. The unified tax regime would sound the death knell for Kannada movies,” said SV Rajendra Singh Babu, chairman of Karnataka Chalanachitra Academy.
The producers are urging the state government to prevail upon the GST Council to have a special tax rate of 5% for Kannada films, while other language films will be taxed at 18%. Another suggestion is that the municipalities be allowed to levy extra tax on other language movies in their jurisdiction.
“The GST Amendment Bill has clearly excluded municipalities and urban local bodies from the ambit of GST. The state government should leverage this opportunity and come out with a tax policy allowing them to levy tax on other language movies and exempt Kannada films,” said Vivek Mallya, a chartered accountant advising KFCC on tax issues.