Entertainment tax on films to be reduced

    MUMBAI: With a view to boost the Indian film industry, the Center has asked various Indian State governments to reduce the entertainment tax on films.


    At the 26th conference of State and UT Ministers of Information and Cinematography – SIMCON XXVI, the information and broadcasting minister Priya Ranjan Dasmunsi highlighted a number of issues facing the film industry. One of the major problems that the industry is facing is that of piracy and also the heavy entertainment tax levied.


    Keeping this in mind, the government has proposed a reduction of entertainment tax from the current 50 per cent to 25 – 30 per cent. The entertainment tax had been gradually reduced from 75 per cent to the current 50 per cent. The minister said that this would further reduce theatre ticket rates and boost sales and footfalls.


    “As we all know India has a very robust film industry. Each year we produce about a thousand feature films, which are exhibited in different parts of the country. While the entertainment tax on the film industry has gradually been reduced from 75 per cent to an average of about 50 per cent, we have been recommending further reduction to 25 – 30 per cent. This will give a boost to the exhibition sector and reduction of ticket rates would encourage more viewership,” he said.


    On another note, Dasmunsi also said that in order to encourage new theaters being established, the licensing process and clearances required from different authorities should be streamlined. “However, different States have different exhibition laws some of which have not kept pace with the changing environment and technology. These would need revision for encouraging private sector participation in film exhibition and theatres,” he said.


    Dasmunsi vouched for the growth of digital exhibition as a measure to curb piracy and also to expand the exhibition sector. “Distribution of cinema in digital formats makes it difficult for pirates to make illegal copies of the film. The digital exhibition equipments would also be priced lower than projectors of film reels. It also helps as producers and exhibitors save on the high cost of making prints for distribution across the country as digital distribution is far cheaper,” he added.


    In order to discourage piracy, Dasmunsi called upon the State Governments to explore the possibility of creation of special cells / wings under the State police for enforcement of the Copyright Act and tackling piracy and to find out the success story of Tamil Nadu Act in this regard.


    “It is the State Governments, which will have to adopt strict mechanisms to prevent piracy. Central Government laws alone cannot help since cinema exhibition is a matter within the State and the entire marketing initiative is done in the States,” Dasmunsi said.


    He also requested the State Governments to facilitate a single window clearance system to promote India as a film shooting destination. “The Government of India has been actively promoting India as a film shooting destination. India has a specific advantage in terms of beautiful locations, advanced studios, trained manpower and increasingly sophisticated post production facilities,” he said.


    “This conference provides us all an opportunity to understand each others’ points of views on the issues that impinge upon the information and entertainment industry of our country. It also enables us to determine our line of action for taking steps to protect the interests of the consumer – the common man. The presence here of a large number of Information Ministers from the States as well as the Union Territories, amply demonstrates the willingness of us all to take effective and constructive steps in dealing with the menace of piracy, implementation of CAS, regulation of broadcasting media, creating an environment to catalyze the healthy growth of this sector and framing laws to create an enabling framework to achieve this end – besides tackling other issues,” said Dasmunsi.


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