1000 Theatres In Tamil Nadu Shut Down Overnight And This Is Why

These are banner times for Indian films. Box office records are being broken on a quarterly basis and the resulting rise in film budgets has enhanced production quality. However, coinciding with the arrival of the highly anticipated Goods and Services Tax (GST) things have taken a turn. A 30 percent corporation/entertainment tax, exclusive to Tamil Nadu, has been enforced in addition to the 28 percent GST. In response to film trade taxes adding up to a whopping total of 58 percent, 1000 theatres have been on strike since Monday, July 3. Tamil Nadu Theatre Owners and Distributors Association, President, Abhirami Ramanathan said, “We are against the Corporation Tax... This is in addition to the GST rates. We are not against the GST. We welcome it.” An inability to pay the excessive taxes will see producers and cinema halls lose money, till the ruling is reversed.

But is everyone supportive of the Tamil Nadu cinema hall strike?

While theatre owners are unanimously behind the strike, creators haven’t been as keen. Ivan Thanthiran director R. Kannan complained that cinema owners “announced the strike without prior notice” and likened the strike to “killing a newborn,” as per reports. Filmmaker Vijay expressed similar sentiments, stating, “While I agree with the Chamber’s concern over double taxation, they also need to take into consideration the fate of films that are currently running in cinemas. My film has just entered second week of successful run and when things finally started to look good, this announcement took everybody by surprise.”

The supernormal profits earned by most production houses in the film industry will be temporarily halted; but more importantly, independent filmmakers like R. Kannan, who is currently unable to repay film loans, stand to lose the most. It’s a tough situation, while the taxation is ridiculous, the loss suffered by filmmakers, financial and professional, should be recognised as well. Only time will tell how the effects of GST will play out, and we’re pretty certain there will be more such incidents to come.