70 per cent of theatres are based in rural areas where tickets can't be sold above Rs 30.
At least 1,100 theatres in Tamil Nadu will stop screening films on Monday to protest the state government's decision to impose a 30 per cent municipal body tax on cinema halls.
Theatre owners say that the new municipal tax will further burden their revenue that will be strained following the implementation of GST or Goods and Services tax from Saturday. With the addition of the 28 per cent tax under GST, movie theatres will now have to part with up to 60 per cent of their ticket sales as tax.
"We can't survive with 60 per cent as tax. If we raise the ticket price the consumer will be hit. They have scrapped this completely in Kerala, Andhra, Telengana and West Bengal," explained Nikilesh Surya, Executive Director of Rohini Silver Screens.
Theatre owners are already under strain over ticket prices in the state. Experts say 70 per cent of theatres are based in rural areas where tickets can't be sold above Rs 30. The fact that the ticket prices have not been revised in the last eleven years have also led to a loss in revenue for theatre owners.
Also a majority of the films have bombed at the box office. "90 per cent of films flop," Tamil superstar Kamal Haasan had said recently.
The state government however claims that the move is aimed to provide revenue to municipal bodies so that they can be compensated for the loss in revenue following the GST rollout.
"Following the GST, its done this way so local bodies would continue to get the tax. However if they represent this to the Chief Minister he would look at it sympathetically," Sellur K Raju, Minister for Cooperatives in Tamil Nadu, said.
Theatre owners in Tamil Nadu are clearly seeing the state government's new tax as a clever move to make up their losses due to GST. The big question however is whether their strike call will cut any ice.