Tamil Nadu cinemas shut to protest against tax hike

NEW DELHI • 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.

Theatres in the southern state darkened their screens from Monday, saying a state tax of 30 per cent on tickets on top of the new national tax of 28 per cent will deter cinemagoers 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 per cent, the highest in the country," Tamil Nadu Theatre Owners and Distributors Association President Abhirami Ramanathan told AFP.

"It is a burden on moviegoers and defeats the objective of the new tax regime," he said.

Mr Ramanathan added that the taxes would encourage people to illegally download films.

The Tamil film industry is India's second-biggest after Mumbai-based Bollywood, and the state accounts for a huge chunk of the US$2.1 billion (S$2.9 billion) annual box-office earnings across the country.


A version of this article appeared in the print edition of The Straits Times on July 05, 2017, with the headline 'Tamil Nadu cinemas shut to protest against tax hike'. Print Edition | Subscribe