The entire regional film industry in India are aghast at the rate of 28% of GST imposed upon the entire Indian film fraternity. It is extremely painful to note that our industry has been tagged along with sinful industries like gambling, horse racing, etc. This kind of high rates of tax will kill the regional films.
Regional Cinema has been placed @ 28% equally along with national cinema i.e. Hindi cinema and Hollywood cinema. Out of total number of films around 2,100 made in India last year, only 400 films are made in national language i.e. Hindi and rest of all are in regional languages with a small and minuscule budget according to the language of cinema. Several films like Bengali, Bojpuri, Manipuri, Marathi, Kannada, Malayalam or Telugu or Tamil portray the culture of their own State which is enshrined in the constitution of India. By placing the regional cinema along with the national cinema all the regional cinemas will get crushed and ultimately the national and the international cinema will rule the Indian market. We very strongly oppose to placing the regional cinema along with national and international cinema and we are making a plea to Government of India that the regional cinema must be lowered to 12% or 18% on the sale of cinema tickets.
Similar happenings occurred in Europe when all other language cinema like Spanish, Italian, French and other language films were killed by the Hollywood movies. We are foreseeing the similar circumstance, if the Government of India places GST @ 28% on the entire Indian continent. Therefore there must be two different rates of taxation for regional films and Hindi/International films.
Cinema is a creative art in making a movie by employing several artistic workmanship of craftsmen including director, artistes, music director, art director and several other crafts. The Government of India has placed 18% GST on the creative art, when such being the case, we
do not understand why we have been placed at the highest slab of 28%, although we feel we are very much within the creative work of 18% .
It is an undeniable fact that the rate of failure of all Indian cinema is between 90% to 95%. As per the guidelines, when a Producer or a Distributor deposits his money in the GST. a/c, this credit could be subsumed or offset only with another GST paid under this a/c. towards that particular Producer or a Distributor.The credit amount will not be refunded to the Producer or a Distributor. Many Producer and Distributor get vanished after a film or two due to losses. So his amount will get struck with Government of India a/c. Considering the peculiarity of Indian cinema, this amount should be refunded to a Producer or a Distributor if underutilized.
Earlier sale of copyright i.e. satellite, distribution etc., Service tax was levied if the films were sold on perpetual / permanent basis.( Usually Regional films are sold on permanent basis). Therefore there is no Service Tax levied. But now new levy of 12% will kill the industry and create a huge burden on the production sector. Therefore we kindly request the Government to levy 5% GST on sale / transfer of copyright.
Film industry wish to state that we are willing to pay tax but do not overburden us with taxes .
In short, we request the following from Government of India:
To reduce GST from 12% to 5% on Copyright sale ; from 18% to 12% on services like artistes, technicians, etc. ; and also from 28% to 18% as Entertainment Tax.