Multiplexes, including PVR cinemas and INOX, here went on strike on Tuesday in protest against the levying of an additional tax over and above the Goods and Services Tax (GST).
This step is in response to a notification issued by the Greater Chennai Corporation (GCC) levying a Local Body Entertainment Tax (LBET) of 20 per cent on non-Tamil films, and 10 per cent on Tamil films with effect from September 27 in addition to the 28 per cent GST on cinema tickets.
"All multiplexes operating in Chennai have announced that they are going on strike starting today," read a statement from the Multiplex Association of India (MAI), according to which the double taxation defeats the purpose of the GST model and went against the principle of 'One Nation... One Tax'.
MAI President Deepak Asher appealed to the Tamil Nadu Chief Minister and GCC Commissioner to consider their request to withdraw the LBET levied on the film exhibition industry in Chennai immediately.
"We believe such withdrawal will ensure the survival of the film industry and will support an environment of safe, secure and wholesome entertainment option for the population of Chennai. On the other hand, continuance of an LBET in addition to GST will render cinema exhibition unviable and will eventually kill the film industry," Asher said.
The Producers Guild of India also affirmed its support to the decision of the multiplex cinema chains in Chennai.
Siddharth Roy Kapur, President of the Producers Guild of India, said: "The decision of Tamil Nadu government to impose LBET to GST on cinema tickets is a highly retrograde step and the Producers Guild of India urges the Tamil Nadu government to withdraw this regressive tax at the earliest in the larger interest of all sectors of the Indian film industry."
The Guild members in a recent meeting had expressed concern that if the LBET is not withdrawn, "it will lead to a significantly huge burden on the pockets of the local audience in the state who would have to shell out in excess of 50 per cent tax on cinema tickets".
In July, theatres had pulled down their shutters and closed their counters protesting against the state government's move to impose a 30 per cent local body tax in addition to the 18 per cent to 28 per cent GST on movie tickets.
A few days later, an eight-member committee was formed to look into the issue.
When the industry was hoping that LBET would be done away with, the order to impose additional tax has come as a rude shock.
"This is a matter of serious concern and the industry cannot survive with an additional tax being imposed," said actor Vishal, General Secretary of Nadigar Sangam and President of Tamil Film Producers' Council.
The General Body Meeting of Nadigar Sangam would be held on October 8 here. The members will discuss various issues including construction of own building for the association, the double-taxation on cinema halls and piracy problems.