Civic body getting ready to impose entertainment tax on cinema tickets

Showdown starts: Coimbatore Corporation makes move to start levying entertainment amid cinema owners’ opposition. | Photo Credit: M_PERIASAMY
In an effort to levy entertainment tax, the civic body has started gathering details from cinemas in the city.
According to sources, the civic body had sought the number of seats, facilities available such as air conditioner and a few more. Once the owners of the cinemas presented those, the Corporation would raise demands and then start collecting those.
The move by the Corporation followed a recommendation by the Fifth State Finance Commission that local bodies levy entertainment tax to overcome loss of revenue. Thus far, the State Government’s Commercial Taxes Department would collect the tax and share 90 % of it to the local bodies concerned.
But with the State Government granting exemptions to several films, the cinemas collected the tax from the public but did not deposit the tax. An RTI reply given by the Government a few years ago to the Coimabatore Consumer Cause said that the money retained by the cinemas across the State ran in several crores.
Now with the Chennai Corporation getting ready to collect the tax from cinemas, the Coimbatore Corporation has followed suit. Sources in the Corporation said that there were around 30 cinemas in the city with most of those concentrated in the Central Zone and taxing them could boost revenue to the civic body.
Coimbatore Consumer Cause’s Secretary K. Kathirmathiyon said that the Coimbatore Corporation should start levying entertain tax at once because the move was justified legally and would help boost its revenue, especially at a time when its outstanding is high.
Even when the Central Government ushered in the Goods and Services Tax, it exempted the collection of tax by local bodies and entertainment tax coming under the local body head, the Corporation was justified in levying the tax. Mr. Kathirmathiyon added that prior to GST, the cinemas did collect entertainment tax but did not pay it to the Government, as revealed in the RTI. Therefore, the levy of entertainment tax would not be much of a burden.
The cinema owners, however, had refuted the arguments. With the State Government not revising ticket fare for the last 15 years, it was unfair to now levy entertainment tax.
The move would result in loss of business, contended M. Subramaniam, president, West Zone Theatre Owners’ Association.
The Government must revise the fare upwards - with the highest ticket price being ₹150 for places outside Chennai - and stop levy of entertainment tax. Until then the cinema owners would not screen any new Tamil movies, he added.
The Association Secretary R.S. Balu said levy of entertainment tax would result in fewer people visiting cinemas. The cinemas in Coimbatore had close to 20,000 seats and around one lakh people watched movies a day.
Source-The Hindu

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