Malayalam film industry fears return of double tax system

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Kochi: The Malayalam film industry is apprehensive of the government imposing double tax on cinema tickets even as the relaxation in entertainment tax granted will end on December 31.

Despite the Goods and Services Tax (GST) being applicable since 2017, Kerala has been continuing with entertainment tax, forcing theatres to remit both the taxes. Incidentally, GST is inclusive of entertainment tax. 

The government announced a relaxation in entertainment tax from April 1 to December 31 following the COVID-trigerred crisis. Theatres, however, could be opened only in October. The government has not hinted at continuing the relaxation. 

Double standard

With the GST regime coming into force, entertainment tax imposed by the local bodies were exempted. The government reportedly used thsi loophole to introduce entertainment tax on cinema tickets. Only Tamil Nadu and Kerala have entertainment tax on cinema tickets in the country.

Kerala has been charging Rs 3.98 on a Rs 100 ticket, Rs 4.40 on a Rs 110 ticket, and Rs 4.56 as entertainment tax on a Rs 120 ticket. Meanwhile, GST is Rs 10,62, Rs 11.68 and Rs 18.15, respectively. No other product or service has double tax in the country.

Cut in revenue

Before the GST regime, panchayats, municipalities and corporations were charging 15%, 20% and 25% as entertainment tax, respectively. Though the entertainment tax was dropped after GST was introduced, the State government later changed its decision. 

Various film organisations have been demanding the government avoid the double tax system. Currently, screenings are done at 50% of the theatre capacity, affecting the revenue. Additionally, theatre managements have to shell out more for meeting Covid protocol.

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