After reeling under the 28 per cent GST levied on films and cinema tickets for four months, the Hindi film industry has united in its efforts to seek reduction on the tax bracket. mid-day has learnt that after the Film & Television Producers Guild of India approached I&B minister Smriti Irani with their concerns, she promptly wrote a letter to finance minister Arun Jaitley on Monday.
In her letter (a copy of which is in possession of mid-day), Irani has drawn attention to how the "current tax regime will negatively impact further investments in cinema production and exhibition sectors." She has further urged Jaitley to examine the issues plaguing the entertainment industry at the next GST Council meeting.
Siddharth Roy Kapur, president of The Film & Television Producers Guild of India, confirms, "Such an exorbitant rate of taxation will lead to lower investment in the industry, loss of employment for cinema workers and a steady decline in the cinema-going habit amongst audiences. Smriti Irani has been responsive and has immediately drawn the attention of the finance ministry to our representation."
Producer Mukesh Bhatt is enraged that the entertainment industry has been slotted in the same tax bracket as liquor and gambling: "Why are we being put in the same slot as alcohol, tobacco and gambling? We are the cultural ambassadors of the country." He further adds that the steep tax rate has already made a dent . "It is impacting the production of movies. Cinema halls are closing down because nobody is willing to pay the high ticket prices. The government doesn't realise that lakhs of people are becoming unemployed in the film industry because of GST. Smritiji understands our problem is a genuine one."
Former CBFC chairperson Pahlaj Nihalani and trade analyst Atul Mohan feel reducing the tax rate is essential. "If it's brought down from 28 to 18 per cent, it'd encourage a better working environment," says Mohan.