Tamil Nadu government's decision to levy Local Bodies Entertainment Tax over and above Goods and Service Tax is a huge setback for the Kollywood industry, said Siddharth Roy Kapur, president of the Film and Television Producers Guild of India.
In a recently released statement, Kapur, expressing his concerns over the Tamil Nadu government's 'double taxation' system in the film industry, said, "The decision of the Tamil Nadu government to levy Local Bodies Entertainment Tax ('LBET') over and above GST is a huge setback for the film industry. Effective July 1, the film industry is liable to GST in two rate slabs of 18 percent and 28 percent and now the industry is in complete dismay having learnt that the Tamil Nadu government has decided to impose 'LBET' of 30 percent making the overall tax rate of nearly 60 percent depending on the ticket pricing."
Continuing, "This move of double taxation by Tamil Nadu government will not only defeat the very purpose of introducing GST as a progressive 'One Nation One Tax' regime but shall also make the industry commercially unviable leading to the closure of cinema halls and loss of jobs."
"The Film and Television Producers Guild of India makes a fervent submission to the government of Tamil Nadu and all other state governments not to impose additional 'LBET' on films pertaining to any language over and above GST which is already in the highest slab of 28 percent," he concluded.
For the unversed, over and above the recently hiked Goods and Service Tax (GST), the Tamil Nadu government has imposed a 30 percent local body tax on the Kollywood industry, which means, a Rs 100 ticket will have 18 percent GST; and for tickets above Rs 100, the GST will go up to 28 percent, plus 30 percent of local taxes.
As a result, nearly 1060 theatres across Tamil Nadu have shut down from July 3, to protest against the ' double taxation' imposed by the state government.