As many as 1,100 theatres will go on an indefinite strike, starting Monday, opposing the new Goods and Services Tax (GST) that has been rolled out.
After the GST was rolled out on the midnight of June 30, theatre owners have been faced with a GST of 18 per cent, apart from the 30 per cent tax imposed by the municipal corporation, adding up to an enormous 48 per cent.
This new rate, as per a local theatre manager, will diminish their business in the state.
"Under the GST, the government charge is 18 per cent and the corporation charge is 30 per cent which totals to a whopping 48 per cent of tax. This is exorbitant and we cannot run with this tax structure. We cannot run the theatres," said Ramasamy, the manager of a local theatre.
Under the new tax regime, taxes of 28 per cent and 18 per cent will be levied for tickets costing over and under Rs100 respectively, in addition to a municipal tax of 30 per cent imposed by the state government on theatres.
Tamil Nadu theatres will be halting advance bookings of tickets from Sunday and all shows across the state's theatres will be suspended starting next week, with film theatre associations demanding a roll back of the municipal tax.
The film industry is also expected to stage a protest on Monday.
Earlier on Saturday, the TN film fraternity, together with all the South Indian industries, notified a collective representation being sent to the Union government, requesting them to put the regional cinema in the "least slab".
President of Tamil Nadu's Film Producers Council, Vishal told ANI, "Of course, there will be adverse effects to every industry, not only film industry, but all sectors of business, especially regional cinema, which is fixed in the highest slab 28 per cent."
"It is going to make a big impact and we have given our representation. In fact, all South Indian industries have together sent a collective representation to the Central government asking them to put regional cinema in the least slab because one crore film and a 1,000 crore Hollywood film is in the same tax slab, so that is definitely going to affect the regional cinema," Vishal added.
He further stated that they have requested the Centre and the finance minister to put the regional cinema in the least slab, non regional films in the next slab and the foreign language films in the highest slab, so that it does not affect the viewership.
Under the GST regime, exports will be zero-rated in entirety unlike the present system where refund of some of the taxes does not take place due to fragmented nature of indirect taxes between the Centre and the states.
However, GST will make India a common market with common tax rates and procedures and remove economic barriers. GST is largely technology driven and will reduce the human interface to a great extent. GST is also expected to improve ease of doing business in India.