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Last Updated Tuesday October 16 2018 04:06 AM IST

Rajini and Allu Arjun's loss could be Malayalam cinema's too

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Glassed and framed photographs of leading Malayalam stars are stacked one upon the other in an obscure corner of the dusty office of one of Malayalam's leading distributors.

The man has the habit of hanging framed pictures of leading stars on the wall of his office the way a devout man would have large pictures of gods on his walls or a CPM party office had the portraits of Marx and Engels and AKG.

But now, he has photographs of only Tamil and Telugu stars on the wall. He has no place for even Mammootty or Mohanlal. Their framed pictures lie with the rest, brushed aside to a corner.

During the last decade, as Malayalam cinema turned more classy and the appeal of the superstars slowly waned, it were mostly high-budget mass entertainers churned out mainly in Tamil and Telugu that sustained Malayalam distributors and exhibition centres.

And now, the State Government is mulling the imposition of entertainment tax on other-language films. This was announced by finance minister T M Thomas Isaac in the Assembly recently.

Before the GST regime came into force, an entertainment tax of 25 percent was levied on all cinema tickets, be it Malayalam English or Tamil. But huge GST rates, initialy it was 28 percent, provoked film industry bigwigs to cry hoarse.

They argued that an entertainment tax of 25 percent over and above the GST would crush the industry. Dr Isaac listened to their pleas, and scrapped the entertainment tax.

The plan now is to restore the entertainment tax only for other-language films. Both Dr Isaac and minister for culture A K Balan sell their new move as an attempt to insulate Malayalam movies from the onslaught of other-language films.

Even Malayalm filmmakers who welcome the move are but apprehensive about the impact it would have on the industry. “The entertainment tax will be good in a way, because it would be helpful for local films,” said Chalachithra Academy chairman and filmmaker Kamal. “But if you add the entertainment tax to the GST, the ticket rates will be so high that it could adversely affect the business of distributors and theatres,” he said.

For Malayali distributors who depend on the mass appeal of a Rajini or a Vijay or an Allu Arjun film for survival, the move smacks of parochial regionalism. “Theatres cannot survive solely on Malayalam movies. This is why we are apprehensive about the move,” said M C Bobby, the general secretary of Film Exhibitors United Organisation of Kerala (FEUOK).

“We cannot move forward if new taxes are imposed at a time when the industry is passing through a crisis. It is because of these Tamil and Telugu films that we manage to hold on even during the off-season,” he said.

Even Malayalm filmmakers who welcome the move are but apprehensive about the impact it would have on the industry. “The entertainment tax will be good in a way, because it would be helpful for local films,” said Chalachithra Academy chairman and filmmaker Kamal. “But if you add the entertainment tax to the GST, the ticket rates will be so high that it could adversely affect the business of distributors and theatres,” he said.

Collection of entertainment tax is the prerogative of local bodies. Isaac had then promised that the local bodies would be compensated for their losses, a promise unkept till now.

The GST is 18 per cent on tickets priced below Rs 100, and 28 percent on those above Rs 100. If entertainment tax is levied, the total tax would be 43 and 53 percent.

However, two issues have given the government pause. One is the issue of double taxation, a phenomenon that the GST regime was brought in to nullify in the first place.

There is a legal stand, which Dr Isaac opposes, that entertainment tax has been subsumed in the GST. Then there is the mandatory provision of level playing field in a democratic economy.

The new imposition can be termed discriminatory to other Indian films, and therefore liable to be legally challenged. A top government source said a decision would be taken only after the taxation in other states was looked at.

If it were revenues that the State was looking for, then experts say a vast area has been left untapped. Cable and dish TV, and internet subscribers are now out of the purview of entertainment tax.

The opinions expressed here do not reflect those of Malayala Manorama. Legal action under the IT Act will be taken against those making derogatory and obscene statements.

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