Kannada film industry still reeling under GST impact

There is a considerable dip in footfall in screens showing Kannada films across Karnataka in the last one month after the rollout of Goods and Services Tax (GST), according to film industry bodies.

Kannada films, till the GST regime kicked in, were exempted from Entertainment Tax of 30%. However, since July 1, they are paying the same tax as applicable to a non-Kannada film. The government, which had promised to compensate this, has not done anything. A delegation from the film industry met Chief Minister Siddaramaiah on July 24 and urged him to step in.

“The collection for Kannada and regional films plummeted by 40% in the last 30 days,” claimed Sa. Ra. Govindu, president of the Karnataka Film Chamber of Commerce (KFCC).

Umesh Banakar, vice-president of KFCC, said most single screens have the ticket rates within ₹100, which includes 18% GST, as increase beyond that price would add another 10% tax. Multiplexes, which have different rates for weekend shows and ticket prices are more than ₹100, attract 28% GST, said a senior executive of PVR Cinemas.

Prices increased

Over 700 plus single screens across the State have increased ticket rates ranging from ₹5 to ₹10 to keep the maximum ticket price within ₹100 to meet the GST norms. But, multiplex screens are charging 28% tax on ticket above ₹100, said K.V. Chandrashekar of the Karnataka Film Exhibitors’ Federation.

Meanwhile, it appears that the Kannada film industry is yet to come to terms with the new tax regime. “Even after migration and having GST number, we are finding it difficult to enter our transaction. Tax to be paid would be calculated based on the entries made,” said exhibitor and member of Film Federation of India Thomos D’Souza.

The practice of maintaining Daily Collection Report and sending the same to the Tax Department has stopped for the last one month.

“Production has been greatly affected as there is no clarity yet on tax benefit transfer from the production to exhibition stage,” said Mr. Chandrashkear, proprietor of Veeresh Films.

‘No confusion’

However, K. Raman, Joint Commissioner of Commercial Taxes, said there is no room for confusion. Producers, distributors and exhibitors have been asked to maintain accounts and make entries in forms, which will be opening from August 1, as scheduled. They are supposed to submit the accounts on August 21 based on transactions recorded by them.

“However, in view of apprehensions despite the efforts of the tax authorities to clarify them, the department will show lenience till September end,” he said.