With the Goods and Services Tax (GST) implemented from July 1, getting watching movies might turn out to be a costlier affair in several parts of the country. Initially, a flat GST of 28% was levied on all movie tickets, regardless of their price. However, on Sunday, Union Finance Minister Arun Jaitley announced revised GST rates, where in tickets costing Rs 100 and below were brought under the 18% slab, while those costing higher than Rs 100 will continue to fall in the 28% slab. While the industry feels that the rates are still very high, what has irked them even more is the possible implementation of a local body tax (LBT), which will vary across the country, making movies the only product/service with dual taxation. However, levying LBT is at the discretion of individual states. For example, while reports suggest that states like Maharashtra, Gujarat and Rajasthan are already empowering their local bodies to levy entertainment tax over and above the GST, states like Kerala have decided against the idea.

18% IS TOO SMALL A RELIEF
Associations representing single-screen owners and multiplex chains met Maharashtra Finance Minister Sudhir Mungantiwar on Monday, to discuss the implementation of the new taxation scheme among other things. Nitin Datar, President of COEAI (Cinema Owners and Exhibitors Association of India), who was at the meeting, told BT, “Some exhibitors are happy that GST rates have been revised; it will bring in some uniformity in the tax structure. Earlier, while some states didn't levy any entertainment tax, some were levying 45% or more. However, smaller centres, where the tax rates were much lower than 18%, are likely to feel the heat. Of the 2,100 films made in India annually, only 400 are in Hindi. The rest are all regional films, of which few make a mark at the box office, despite being tax-free. Regional films across the country will be in a mess because for them, 18% and 28% are still very high figures. They shouldn't have been taxed over 5%, given that they incur more losses than profits. Regional producers employ so many people despite their losses. For them, it will now be a fight for survival. Also, there's no clarity on the structure and implementation of local body taxes either.“

Deepak Asher, President, Multiplex Association of India, says that 18% GST on cinema tickets priced under Rs 100 is too small a relief. The mathematics is simple: Tickets priced below Rs 100 form roughly 10% of the total number sold, which is around 6% of the revenue. Also, with the current rate of tax on cinema exhibition across India being around 19.5%, the new rates can prove to be detrimental, especially when they're clubbed with local body taxes. He rues, “We are grossly disappointed because this will hamper growth. Cinema halls across the country have been downing shutters over the last two-three years, even in states where the tax rates were lower than 18%. Regional films that were so far exempted from entertainment tax will land in a suicidal situation with the new tax regime. Smaller multiplexes in the interiors depend on these movies. What will they do? We also have to pay an additional entertainment tax that the local municipal bodies will levy, depending on various factors. Where does that leave us?“


HIKING TICKET RATES NOT AN OPTION
Modest estimates suggest that India approximately has 9,000 screens, of which roughly 4,000 are in the Southern states of Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and Telangana, where most movies screened are in regional languages. Asher continues, “On multiple occasions, we requested that cinema be taxed lightly because it helps generate income, employment, add more screens and check piracy and black marketing. However, not only have we been placed in the 'sin industry' bracket, we have also been taxed heavily in two layers. And, we can't even escalate ticket prices beyond a point because that will affect consumer footfall. Only when we have more clarity on local body taxes can we decide the way forward.“

If the municipal bodies choose to do away with the local body taxes, cine-goers in states like Maharashtra and Delhi could gain from the 28% GST rate, since the existing rate in these states is around 38% to 40% on an average. On the other hand, it will have an adverse effect on states like Punjab, Andhra Pradesh, Telangana, Gujarat and Chhattisgarh where the rates were much lower before. Vikram Malhotra, producer of movies like Noor and Airlift, says, “The government has missed the only chance it had; they could have corrected so many flaws in the existing tax structure. To begin with, this is an expensive business, with very little scope to cut corners. Talent is the costliest element in my scheme of things and since it's based on an individual's demand and supply, I can't tackle its cost. For producers, it's a squeeze situation - we can't pass on our cost pressure to the audience, we have to tackle organic industry competition from every corner and grapple with dual taxation as well.“

INDUSTRY SIDELINED
A few days prior to meeting the state Finance Minister, a delegation comprising studio honchos, producer bodies and Censor Board chief Pahlaj Nihalani had met Maharashtra Chief Minister Devendra Fadnavis and Union Minister Venkaiah Naidu, requesting some relief for the entertainment industry. Filmmaker Mukesh Bhatt, the former chief of the Film and Television Producers' Guild of India, says, “Successive governments were made aware of our situation, but nobody has done anything for us. How much tax do they expect us to pay when the business isn't as great as they think it is? Most countries in the world don't tax their entertainment industry the way we do. With this so-called One Country One Tax scheme, they will ensure that our industry dies of breathlessness. Eventually, dubbed Hollywood films will take over.“

In fact, over the last couple of weeks, representations have been made to various power lobbies to ensure that the film industry doesn't fall under heavy taxation, but in vain. Siddharth Roy Kapur, the current chief of the filmmakers' guild, says, “The industry does appreciate the revision the GST slab on cinema tickets. However, we believe that the Indian film sector deserves to be taxed at a much lower rate to encourage further investment, employment and growth, which in turn will lead to higher tax revenues for the government. We also urge local bodies across the country to avoid imposing additional entertainment taxes.“

Arjun N Kapoor, who has produced Rustom, points out how America has used films to establish its supremacy in the space of art and culture. “I don't know why our government doesn't see that potential in our films. If the tax structure was friendlier, we could do so much with our stories. Besides, we'd also contribute immensely in the space of employment and revenues.“

Producer-distributor N R Pachisia, who was also part of the delegation that had met Fadnavis earlier, says, “I'm glad to see Arun Jaitley help the film industry with revised GST rates. Though the government has been considerate, the final impact is yet to be seen. States like Punjab had no entertainment tax so far. While Marathi and Tamil cinema had tax exemptions, tax was nominal for Telugu and Bengali cinema. With the new rates ready to be implemented, we'll have to wait and watch how the situation unfolds.“

SOUTH INDUSTRY RAISES CONCERNS
Abirami Ramanathan (president, Tamil Film Chamber of Commerce and president, Chennai Theatre Owners Association) believes that the proposed GST wouldn't impact Tamil cinema to a large extent. He says, “Only a few theatres in the city charge Rs 120 per ticket. It's less than Rs 100 at the remaining cinema halls. So, I don't think the new GST will affect the business.“

However, actor Vishal (president, Tamil Film Producers Council, and general secretary, South Indian Artistes' Association) feels that price revision is necessary to cushion the impact of the new GST rates. He says, “We will appeal to the state government to remove the cap on ticketing to break even. Since 2009, there has been no revision in ticket rates (the maximum that a multiplex can charge is Rs 120). Of course, certain movies enjoy tax benefits (Thirty per cent entertainment tax is waived off for films that are titled in pure Tamil and have procured U certificate), but the fraction is quite nominal. I believe that theatre owners and distributors should be allowed to decide the price of tickets of every film - big or small - according to its capabilities. In Telangana, the government had announced flexible pricing policy to not burden the audience. For instance, if it's a Rajinikanth film, everyone would want to see it in the first three days, irrespective of the price. So, we should be able to increase the rates during the weekends and bring it down on weekdays so that the other section of audience can watch it, too. Also, we should focus more on the transparency in BO collections. These two moves should help us tackle GST.“

A senior member from the Kannada Film Producers' Association said, “While the reduction of GST on single screens comes as a temporary relief, we have a bigger problem to contend with. Till now, our films were completely exempted from taxes, but with the multiplexes having the same tax rates for all languages, it will hit our consumers harder. We still are wondering how to get this problem sorted.“ The Kannada film industry is hoping to ask the state government to waive off their share of the GST, given how the new tax will be equally split between the Centre and the state. Whether the state government will continue to lend its support to the local industry is the current topic of concern in Sandalwood.

-Lakshmi.V@timesgroup.com and Sunayana.Suresh@timesgroup.com

After censor copies of Sairat, Udta Punjab and Great Grand Masti unceremoniously turned up online for free downloads, Central Board of Film Certification (CBFC) Chief Pahlaj Nihalani has devised a mechanism to safeguard future films that are submitted to the board for clearance.

In the preceding months, while a censor print of Nagraj Manjule's Sairat surfaced online only after the film gained momentum at the box office, Abhishek Chaubey's controversial drugs-drama, Udta Punjab, and Indra Kumar's Great Grand Masti were leaked even before the films' theatrical release. The Riteish Deshmukh, Aftab Shivdasani, Vivek Oberoi-starrer adult comedy that was slated to release on July 22 had to be pushed earlier to July 15 to minimise the impact at the box-office.

Filmmaker N R Pachisia, General Secretary, Governing Committee of the Indian Film and Television Producers Council (IFTPC), pointed out to Mirror that piracy and DVD leaks are rampant down South too. Recently, Suriya-starrer sci-fi drama, 24, was leaked from a private viewing room in Bangalore. “Censor copy leaks have led to a fear of losing money among filmmakers. While it may have had only a minor effect on Udta Punjab, it damaged Ekta Kapoor's Great Grand Masti. Piracy really kills,“ Pachisia asserts, adding, that today, the CBFC has the necessary digital aid to safeguard the filmmakers' rights. “It is not just the producers losing money but also the Central Government, which loses crores in entertainment tax because of piracy,“ Pachisia added.

IFTPC President Sajid Nadiadwala, Vice Presidents Ramesh Taurani and Ratan Jain, and members Harry Baweja and JD Majethia have welcomed this move. Filmmaker Vijay Galani, member of IFTPC's Governing Council, said, “It is now mandatory for all producers to submit their film for certification only via DCP. The CBFC chief will accept no other forms of communication. This stance has been appreciated by the IFTPC. There are huge costs involved and we are reducing the number of people who will have access to the final print before release. DCP leaves no scope for mischief.“

The CBFC, with the approval of the Information and Broadcasting Ministry, has already sent out letters instructing the film fraternity to share their films only through DCP. The process should be fully enforced by September 1.

HOW DOES DCP WORK?
Digital Cinema Package (DCP) is a collection of digital files to store and share audio, image and data streams: Filmmakers, distributors rely on digital-cinema-encoding to produce and quality control-check a film before its release. Facilities follow strict guidelines to ensure compatibility with all digital cinema equipment.

When a film is uploaded, it is time-coded and space-coded and only accessible with a complex password. Eg: A film encrypted for a particular screen for a 12pm to 3pm show, will cease to be available for viewing later.

There are two companies in India - Scrabble and it's parent company UFO - that send encrypted films to theatres, leaving no scope for piracy.

Oh, don't let all their camaraderie fool you. Bollywood egos are legendary. And in their own heads, each superstar imagines that the sun first rises outside his bedroom. So while it may be fine to clink glasses and show each other how “they love one another“ on social media, actors are actually spoiling for fights in their own way.

The latest weapon they have found to declare war on one another is a release date. All Bollywood biggies know that when their films clash on the same date, catastrophe will strike. But do they care? No. It's the law of the jungle - may the mightier one win. Of course, there is no denying that there are only 52 Fridays available in a calendar year and at least 150 films are vying for these dates. It is a well-known fact that dates like Republic Day, Eid, Diwali, Independence Day and Christmas weekends are also coveted because they bring in huge box office numbers.

The last face-off of 2015 between Bajirao Mastani and Dilwale left many people within the trade red-faced. So will good sense prevail in 2016? “No way,“ says a trade insider. He adds, “Clashes are starting as early as January this year. Airlift and Kyaa Kool Hain Hum 3 have both decided to release on January 22.“

Throwing light on the situation, the source says, “Let's give the devil his due. Even if we do not look at it as an ego thing, clashes are inevitable. There are as many as 10 films lined up for release in January. The month that was years ago called jinxed January has now gone on to become jammed January because of the rush at the marquee.“

If you're wondering what are the two questions on everyone's mind in Bollywood, then they are: Will Raees and Sultan clash on Ramzan Eid as announced earlier? And will Karan Johar and Ajay Devgn bring Ae Dil Hai Mushkil and Shivaay together on Diwali?

In all fairness, SRK had hinted in an interview that the release date of Raees could be shifted. Will it then move to the Independence Day weekend? If it does, then what happens to movies like Akshay Kumar's Rustom and Hrithik Roshan's Mohenjo Daro? Will they automatically shift to October 2?

Forget the biggies clashing; even debutants may not be spared. It is being said that Harshvardhan Kapoor's (Anil Kapoor's son) Mirzya may have to vie with Emraan Hashmi's Azhar for a piece of the pie on May 13.

Akshay, by virtue of the fact that he does a minimum of three films a year, is bound to clash with more than one hero. If all goes as per plan, after he has clashed with Tusshar in January, his Housefull 3, which is the first big-ticket venture post the Indian Premier League, is expected to clash with lovebirds Ranbir Kapoor and Katrina Kaif 's Jagga Jasoos. Not to forget, Emraan Hashmi's Raaz Rebooted also wants a window here.

Producer-distributor N R Pachisia sums up saying two big-ticket films should avoid clashing together. He explains, “With films like Bajrangi Bhaijaan, PK and Dhoom 3, we have seen strong solo releases registering huge numbers. When two films release together, the business gets divided. The better film gets higher numbers. I believe such clashes should be avoided as collections get split up and comparison kills.“

But do prima donnas care? No, they continue to pretend that they are the only ones in the orbit. Others with whom they 'party with' are incidental.