TN govt slaps 10% tax beyond GST on new Tamil movies, 20% on non-Tamil ones

For old movies, the tax would be at 7% for Tamil language ones and 14% for those in other languages

The Tamil Nadu government has issued an order levying entertainment tax on the exhibition of movies in theatres. Under the order, Chennai will see 10 per cent tax levied on Tamil language movies and 20 per cent tax on movies in other languages, over and above the Goods and Services Tax (GST). 

Further, the state's local bodies had been planning to levy a 30 per cent tax other than GST. However, the tax was not implemented due to protests from theatre owners.

According to a notice issued by the Greater Chennai Corporation's revenue department, the entertainment tax would be levied at this rate from September 27, 2017, at theatres, whether permanent or semi-permanent, located within the limits of the corporation.

For old movies, the tax would be at the rate of seven per cent for Tamil language movies and 14 per cent for movies in other languages.

The entertainment tax will be collected based on GST returns filed by the proprietor before the Commercial Tax Department, said the notice. 

Also, the system of stamping tickets has been done away with to ensure hassle-free tax remittance, added the notice.

Tamil Nadu Cinema Theatre Owners Federation President Abirami Ramanathan said that the organisation would be holding a meeting to discuss the new tax and would come out with its opinion afterward.

Earlier, the state's theatres had held a strike for several days over the decision to impose 30 per cent entertainment tax in addition to the 28 per cent GST on the film trade. Back then, theatre owners had said that Tamil Nadu was the only state in the country that had announced a separate tax in addition to GST. Ramanathan pointed out that the local body tax of 30 per cent was in addition to the GST tax rate of 28 per cent for tickets that cost over Rs 100 and 18 per cent for tickets priced less than Rs 100. He said an additional levy of about eight per cent under GST would push total taxes to over 60 per cent.

The strike was called off after the government announced that it would not levy the additional tax and allowed the theatres to increase ticket prices, which had been stagnant at Rs 120 for several years. The Tamil Nadu film industry, directly and indirectly, employs about one million people, Ramanathan said.