More than 1,000 cinemas in the Indian state of Tamil Nadu have closed in protest at a hike in taxes after the government introduced a nationwide levy. Movie theatres in the southern state darkened their screens from Monday, saying a state tax of 30 percent on tickets on top of the new national tax of 28 percent will deter cinema-goers and encourage piracy. The government introduced a new goods and service tax (GST) on Saturday in India’s biggest-ever fiscal reform.
It intends to replace more than a dozen national and state levies with a single unified tax code. But as part of negotiations to get states to accept the GST, the government agreed some could impose additional local levies. Tamil Nadu has targeted cinema tickets.
“The tax rate on tickets is 58 percent, the highest in the country,” Tamil Nadu Theatre Owners and Distributors Association President Abhirami Ramanathan told AFP. “It is a burden on movie-goers and defeats the objective of the new tax regime,” he said.
Ramanathan added that the taxes would encourage people to illegally download films. The association accepts the new GST but says cinemas cannot afford the state duty as well.
The Tamil film industry is India’s second biggest after Mumbai-based Bollywood, and the state accounts for a huge chunk of the $2.1 billion annual box office earnings across the country. Tamil film industry representatives say the taxes could affect the livelihoods of nearly one million people.
