CM Devendra Fadnavis promises to request government to lower entertainment tax under GST Act
8:07 AM
Fadnavis
promised to request the government to lower new entertainment tax under
the GST Act after meeting with Pahlaj Nihalani, studio heads and IFTPC
Sanyukta Iyer (MUMBAI MIRROR; June 3, 2017)
A month before the implementation of Finance Ministry’s proposed GST act, under which a 28 per cent tax will be levied on cinema tickets, a delegation led by Censor Board of Film Certification Chief Pahlaj Nihalani met Maharashtra Chief Minister Devendra Fadnavis at his Malabar Hill bungalow on Thursday.
The meeting was facilitated by BJP Mumbai Chief Ashish Shelar. The delegation comprised of members of the Indian Film and Television Producers Council (IFTPC) Ramesh Taurani, Vijay Galani, NR Pachisia, and studio heads Vijay Singh, CEO Fox Star Studios, Apoorva Mehta, CEO Dharma Productions and Utkarsh Sanghvi, Partner at Ernst and Young. The hour-long meeting was followed by another one at the State Finance Minister Sudhir Mungantiwar’s residence at 11:30 pm to discuss the new GST rates, which were announced on May 19.
According to Galani, the filmmakers had had a meeting with Ernst and Young earlier that day to verify, understand and improve their knowledge of the numbers and the present situation of the market.
“The meeting was imperative since final decisions will take place on June 3-4. The delegation pushed for the meeting as a prelude to the State Government’s meeting with Finance Minister, Arun Jaitley, to apprise him of the difficulties faced by the film industry in light of the proposed GST act will be a death knell for the film trade,” filmmaker Vijay Galani told Mirror, revealing that the CM has promised to push for a 10 per cent reduction in the GST and will submit a final request accordingly.
The GST rate comes as a huge setback for the film industry since its proposal to the government, in order to revive businesses struggling due to lack of new investments in screens and increase in online piracy, was five per cent. Last week, producer Siddharth Roy Kapur, who is also the President of the Film and Television Producers Guild of India, had released a statement condemning the move by the Central Government. “The CM was supportive and patiently heard us out. He categorically assured us that he will personally be proposing to the Central Government to lower the GST to 18 per cent,” Galani recounts.
In the meeting, Nihalani pointed out that revenue from ticket sales is consistently dwindling and while the actors, directors and other technicians make money, it is the producers that are truly suffering. He argued that risks of being an independent producer have increased manifolds so studios are now looking at crowd-funding to release films. “More than 90 per cent of films are in losses. It is only the passion and dedication of Indian producers that has kept them from going out of business in spite of the total lack of support from the Central Government. We are already taking measures to reduce piracy but there needs to be support in terms of a reduction of taxes,” Nihalani asserted.
Filmmaker Taurani emphasised that the average rate of entertainment tax presently is at 10 per cent if the weightage for tax exemption granted to local language films, regional projects and districtwise variable rates of entertainment tax are taken into consideration. “The proposed tax is actually a travesty. As a team, we urged the CM to also arrange for another meeting, after a decision for the budget is made, to help the film industry break free from piracy, high taxes and lack of infrastructure,” he told Mirror.
NR Pachisia, Vice President of IFPTC, argued that the total revenue collected from the film industry is presently at an approximate figure of Rs 230 crore, which is less than 0.2 per cent of the total revenue collected by Maharashtra Government. He further asserted that more than five lakh employees are engaged in the film industry and a reduction in footfalls at cinemas directly impacts them. “There is already a massive decline in the footfall and any GST above 10 to 12 per cent will prove disastrous. The footfalls have already registered an alarming decline from 9.3 per cent in 2015 to three per cent in 2016 owing to the digital boom,” Pachisia reasoned.
Haasan condemns GST hike
Meanwhile, at a press conference in Chennai on Friday, Kamal Haasan reasoned that a GST as high as 28 per cent will ruin the regional film industry. “Tamil cinema has little market outside the country. They cannot afford to pay this kind of tax. Regional cinema makes Indian diversity strong. You can’t introduce a monoculture in a country like India.”
A month before the implementation of Finance Ministry’s proposed GST act, under which a 28 per cent tax will be levied on cinema tickets, a delegation led by Censor Board of Film Certification Chief Pahlaj Nihalani met Maharashtra Chief Minister Devendra Fadnavis at his Malabar Hill bungalow on Thursday.
The meeting was facilitated by BJP Mumbai Chief Ashish Shelar. The delegation comprised of members of the Indian Film and Television Producers Council (IFTPC) Ramesh Taurani, Vijay Galani, NR Pachisia, and studio heads Vijay Singh, CEO Fox Star Studios, Apoorva Mehta, CEO Dharma Productions and Utkarsh Sanghvi, Partner at Ernst and Young. The hour-long meeting was followed by another one at the State Finance Minister Sudhir Mungantiwar’s residence at 11:30 pm to discuss the new GST rates, which were announced on May 19.
According to Galani, the filmmakers had had a meeting with Ernst and Young earlier that day to verify, understand and improve their knowledge of the numbers and the present situation of the market.
“The meeting was imperative since final decisions will take place on June 3-4. The delegation pushed for the meeting as a prelude to the State Government’s meeting with Finance Minister, Arun Jaitley, to apprise him of the difficulties faced by the film industry in light of the proposed GST act will be a death knell for the film trade,” filmmaker Vijay Galani told Mirror, revealing that the CM has promised to push for a 10 per cent reduction in the GST and will submit a final request accordingly.
The GST rate comes as a huge setback for the film industry since its proposal to the government, in order to revive businesses struggling due to lack of new investments in screens and increase in online piracy, was five per cent. Last week, producer Siddharth Roy Kapur, who is also the President of the Film and Television Producers Guild of India, had released a statement condemning the move by the Central Government. “The CM was supportive and patiently heard us out. He categorically assured us that he will personally be proposing to the Central Government to lower the GST to 18 per cent,” Galani recounts.
In the meeting, Nihalani pointed out that revenue from ticket sales is consistently dwindling and while the actors, directors and other technicians make money, it is the producers that are truly suffering. He argued that risks of being an independent producer have increased manifolds so studios are now looking at crowd-funding to release films. “More than 90 per cent of films are in losses. It is only the passion and dedication of Indian producers that has kept them from going out of business in spite of the total lack of support from the Central Government. We are already taking measures to reduce piracy but there needs to be support in terms of a reduction of taxes,” Nihalani asserted.
Filmmaker Taurani emphasised that the average rate of entertainment tax presently is at 10 per cent if the weightage for tax exemption granted to local language films, regional projects and districtwise variable rates of entertainment tax are taken into consideration. “The proposed tax is actually a travesty. As a team, we urged the CM to also arrange for another meeting, after a decision for the budget is made, to help the film industry break free from piracy, high taxes and lack of infrastructure,” he told Mirror.
NR Pachisia, Vice President of IFPTC, argued that the total revenue collected from the film industry is presently at an approximate figure of Rs 230 crore, which is less than 0.2 per cent of the total revenue collected by Maharashtra Government. He further asserted that more than five lakh employees are engaged in the film industry and a reduction in footfalls at cinemas directly impacts them. “There is already a massive decline in the footfall and any GST above 10 to 12 per cent will prove disastrous. The footfalls have already registered an alarming decline from 9.3 per cent in 2015 to three per cent in 2016 owing to the digital boom,” Pachisia reasoned.
Haasan condemns GST hike
Meanwhile, at a press conference in Chennai on Friday, Kamal Haasan reasoned that a GST as high as 28 per cent will ruin the regional film industry. “Tamil cinema has little market outside the country. They cannot afford to pay this kind of tax. Regional cinema makes Indian diversity strong. You can’t introduce a monoculture in a country like India.”
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Bharati Dubey (MID-DAY; June 3, 2017)
Days after mid-day reported about the film industry’s disapproval of the inclusion of cinema services, including the price of tickets, under the 28 per cent tax bracket in the Goods and Services Tax (GST) regime, it is now learnt that producer and Central Board of Film Certification (CBFC) chief Pahlaj Nihalani met with chief minister Devendra Fadnavis to discuss the concern.
In a meeting that was held late night on Thursday, Nihalani, along with other film producers, including N R Pachisia, Ramesh Taurani and Vijay Galani, appealed for a reduction in the tax slab to 18 per cent. He says Fadnavis assured the team that the topic would be presented in the GST meeting set to take place in Delhi today.
Nihalani, who along with industry folk submitted a memorandum that highlighted their request, tells mid-day, “We are thankful to chief minister Devendra Fadnavis for meeting us at such a short notice. State finance minister Sudhir Mungatiwar was also present in the meeting. The NDA government has always been supportive of the film industry. It was this government that even recognised us as an industry.”
Nihalani claims he will continue to stand by the government's One Nation One Tax slogan, which calls for a uniform tax rate to be levied across all Indian states, and will push for cinema services to be included in the12-18 per cent bracket. He also raised concerned about regional cinemas, which would be affected if the 28 per cent tax rate wasn’t reduced. “We have requested the government not to change the tax structure for Marathi cinema. Stars from the regional film industry are also meeting their respective governments. I heard that Kamal Haasan has met the Kerala chief minister on Friday. He and Rajinikanth had earlier met the Tamil Nadu government as well.”
Touted as the biggest tax reform in India, GST was expected to lower the tax burden for the industry, which has witnessed tough times recently.
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