TN halves entertainment tax on films but tickets may not be cheaper

CHENNAI: The Tamil Nadu government has halved the Local Bodies Entertainment Tax on cinema tickets, bringing it down from 8% to 4%. The film industry, which has long argued that the previous tax rate disproportionately affected small and mid-budget films, welcomes the move.

According to a Daily Thanthi report, over 1,000 films are released in Tamil Nadu annually. Industry representatives have repeatedly said that the 8% tax pushed up ticket prices and hurt revenues, especially for smaller productions. The Film Employees Federation of South India (FEFSI) thanked Chief Minister MK Stalin for responding to what they called a long-standing demand.

Until now 8% Local Bodies Entertainment Tax was added to movie ticket prices. Many in the film industry had been saying the tax was too high and had been requesting the government to reduce it. On paper, this reduction, oddly, makes no difference. While it is expected to ease the burden on producers and distributors, it may not translate into cheaper tickets for moviegoers.

"This reduction doesn't benefit theatre owners," said Tirupur Subramaniam, a distributor, theatre owner, and former president of the Tamil Nadu Theatre Owners and Exhibitors' Association.

"Ticket prices haven't gone up in the last 7-8 years. Even as operational costs from electricity to property and water taxes have increased, we've kept prices steady. There's no room to reduce them further,” he said.

Some filmgoers also felt the change made little difference. "The ticket might come a few rupees cheaper, but the cost of snacks, like popcorn, etc., inside the theatre is still absurd and no one is regulating that," said Karthik, a regular moviegoer.

"Bringing down the price of cinema tickets is a good move, but the other charges collected by multiplexes are high and they blame it on the electricity bill. Parking charges have also been hiked by theatre owners; some multiplexes charge Rs 30 per hour for parking. A family of five will end up spending more than Rs 2,000 to watch a movie," says N Udayakumar, advocate, Madras High Court.

“Every cool drink or coffee is sold at double the market price; policy makers should look into this for the sake of consumers,” he added.

It may be noted that the Greater Chennai Corporation has passed a resolution to levy a 10% entertainment tax on tickets for commercial events, a separate move that could affect pricing for concerts, shows, and other non-film performances held within institutions like schools and colleges.