A decision has been taken to waive 3 months' entertainment tax and 50 percent of fixed charges on electricity in cinema halls.

Two men in PPE kits sanitising a theatre The empty seats are red in colourImage for representation | PTI
Flix Entertainment Monday, January 11, 2021 - 17:10

In a major relief to the film industry and cinema halls in Kerala, the state government has decided to exempt entertainment tax for theatres in the state from January to March 2021. The decision was made at a high-level meeting, chaired by CM Pinarayi Vijayan, with industry stakeholders.

In 2019, the Kerala government had issued an order allowing local self-governing institutions to collect entertainment tax from cinema halls upto 8.5% from the sale of movie tickets. The order was issued in order to compensate for the loss of revenue incurred by the state due to the implementation of the Goods and Services Tax (GST). However, the decision turned controversial after the Film Exhibitors’ United Organisation of Kerala and the Kerala Film Chamber of Commerce argued that this decision amounted to double taxation as cinema hall owners were already paying GST on movie tickets.

However, following the struggles of theatre owners during COVID-19 pandemic, the state has decided to waive this tax. Moreover, it has also been decided to reduce the fixed charges incurred by cinema halls in their electricity bills by 50%. The other 50% can be paid in instalments.

The property taxes from March 2020 that cinema halls have to pay to their local bodies can also be paid in monthly instalments. With regard to professional tax, the government has decided that it will not be able to take a call on waiving it.

Further, the government has promised to extend the deadline for license renewals for theatres until March 31, 2021. The call has been taken after consultations with local self governing bodies, the electrical inspectorate, Films Division certification body, Building Fitness, Fire Force and the health department, etc.

The meeting was held after the Kerala Film Chamber of Commerce asked for tax exemptions along with other demands in order for film theatres to open in the state. It was following this that a meeting was convened with CM Pinarayi Vijayan.

“This is definitely a welcome move by the Kerala government. They have agreed to most of our demands and made it possible for theatre owners to reopen halls without incurring major losses. With regard to the professional tax, the state government cannot unilaterally decide on a waiver due to certain legal clauses,” Anil Thomas, Vice President of Kerala Film Chamber of Commerce told TNM.

The meeting was also attended by the Power Minister MM Mani, Minister for Local Self Government AC Moideen, Chairman of the Kerala State Electricity Board (KSEB) NS Pillai among others.

The Kerala government had permitted cinema theatres to open with 50% capacity from January 5, 2021 onwards. However, theatre owners refused to reopen halls until they were provided support in terms of fee waivers by the state government. This was earlier too communicated to the state government by industry stakeholders.

With the state’s decision to accept their demands, most theatres will open in time for the release of Vijay’s Master, which will hit the screens on January 13.

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