GST impact on Kollywood: Ticket prices to turn costly in Tamil Nadu?

The Tamil Nadu government has protected the interest of cinema audience in the state for years by putting a cap on movie ticket prices. But now, the benefits enjoyed by the cine-goers so far will stop as the state is getting ready to implement GST (Good & Service Taxes).

In 2006, the Karunanidhi government took a major step to give a relief to the film industry by introducing 30 percent tax exemption for movies with Tamil titles. Jayalalithaa's government, which came to power in 2011, modified rules and passed an order to waive off tax for films that meet several criteria including 'U' certificate from the regional censor board.

Since then, tax exemptions have been used as a tool to control the cinema industry by people in power. Many filmmakers took the issue to court after their films were denied tax exemptions.

In spite of all the issues, the Tamil audience were never burdened, thanks to the cap on ticket prices. A cine-goer paid Rs 120 at the max to watch a movie in a multiplex. Now, it is likely to be changed.

Apart from GST, the state government is expected to impose additional tax, thereby making ticket price dearer. This will once again ensure the government will have a firm control over the industry, which has often worked hand-in-glove with the ruling government in Tamil Nadu.

Now, the ticket priced at Rs 120 will be Rs 153.60 after dual taxation.

GST Implementation
The centre has put the cinema under 'sin industry' and imposed 28 percent tax on movies. It came as a blow to South Indian film industry. All the four South industries (Tamil, Telugu, Kannada and Malayalam) had enjoyed tax exemption for their respective language movies. But now under One Country One Tax scheme, the regional industries are expected to lose its long-enjoyed benefits.

A delegation from South Indian film industries requested the Centre to reconsider it and the Finance Minister Arun Jaitley revised it. The tickets costing Rs 100 and below have been brought under the 18% slab, while those costing higher than 100 will continue to fall in the 28% slab.

The Kerala, Karnataka and Andhra governments have decided not to add additional tax apart from GST, while the Tamil Nadu government has not taken a decision yet and is most likely to impose additional tax.

With only two days left for the GST rollout, several bodies from Kollywood is holding crucial meetings to fix the issue. Will the government bow to their demands?