In a press meet, the Tamil Film Distributors’ Association members have put forward their latest resolutions with respect to Tax Deducted at Source (TDS) and the Local Body Entertainment Tax (LBET).
“Our request is for the government to rollback the TDS that will come into effect from April 1. We won’t be able to survive if 10% TDS is deducted from our earnings. We will not be able to distribute films if that is the case. From March 27, we will not distribute any films if that is the case,” said T Rajendhar, President of Chennai-Chengalpattu-
“We consider those who make profits from films to be lucky. It has become very rare these days. How can we be expected to pay TDS from just the turnover? We will be able to deduce if the film has been successful or not only after going over the collection,” he stated.
“Let’s say the turnover is Rs 10 crore. Theatre owners will have to deduct 10% from our share as TDS and then give us the remaining. Profit or loss does not matter. The TDS will eat into our share,” he added.
The Centre had announced that 10% TDS is applicable to film distributors, and it is expected to be implemented from April 1, 2020. Film distributors in Tamil Nadu are currently paying GST of 18-28% (18% when ticket prices are below Rs 100) and LBET of 8%. In addition to this 36% tax, they will now have to pay 10% TDS. The film fraternity has already asked the Union Finance Minister in the past to withdraw the TDS.
Senior film journalist Sreedhar Pillai explains that the implementation of TDS will come as an additional burden for those in the Tamil film industry because the tax structure is not the same in the other industries. “Other industries don’t pay LBET. If GST was supposed to be one tax, the addition of TDS and LBET for those in TN has caused them inconvenience," he explains.
T Rajendhar said that distributors were the bridge between producers and theatre owners, and claimed that such taxes would destroy them completely.
Referring to multiple taxes levied on film distributors in Tamil Nadu, T Rajendhar said, “We would like to tell Tamil Nadu Chief Minister that local body tax is an added disadvantage for us. No other state has it. CM has to consider our request and remove it.”
In September last year, members of the Tamil Film Producers' Council (TFPC) Committee met Finance Minister Nirmala Sitharaman in Chennai to discuss problems related to the Goods and Services Tax and service tax in the film industry. According to the TFPC, the issue arose from a degree of mistrust between the producers, distributors, and actors, since there was no accurate way to gauge box office collections.