The current hot topic is the new GST for entertainment industry which is announced as 28%. SR Prabhu of Dream Warrior Pictures and Potential Studios and also the treasurer of TFPC had tweeted, “#GST will redefine the way #filmIndustry has been working. We must adopt ourselves asap. Else we will be pushed another 5 yrs behind”. We talked to him to get his opinion on this and this is what he said.
What would be the impact of the new GST?
It will bring more discipline to the business, financially. TDS and service tax have not penetrated more into the film industry. Transaction for service tax for professionals has been going on for the past couple of years only. When compared to other department, the service tax department is becoming systemized now. Now, in the industry, they have to plan more with finance department too.
People have got used a to a particular tax system and to get used to a new one, it would take time. A sudden jump of 28% will surely impact the business which is already struggling with a lot of problems.
Are you okay with the new tax structure?
I am ok with any tax system. As Indian citizens, we have to support the government by paying taxes properly. But I am not ok for treating regional and Hollywood films on the same platform. Perhaps, we need to approach the state government seeking concession on the tax system. The State government has been giving us concession on VAT and commercial tax.
How can we adapt ourselves to the new tax structure?
The majority of the producers are newcomers. They are not aware of the business at all. They should have a clear knowledge of accounting and tax structure. They are in it because of their passion. Their challenge is the accounting area. Along with the creative aspect, they should also have clarity on the financials because this will play a major role. We have to adapt ourselves to the new system. Of course, it is difficult to change people but we have to.
What would be the impact of the new ticket pricing on the audience?
Already, there has been an impact. Here in Tamil Nadu, people feel that the ticket price is high, although when compared to other states, it is low. People don’t mind paying Rs 25 for a liter of water, which is, in fact, an essential commodity, but they complain about cinema which is only entertainment. The state government has to look into this.
We have already made a representation about the ticket price regulation. There is a misunderstanding on this. People think we are asking for a ticket price rise, but NO. We are only asking for regulation. We say that the ticket price should be based on the facilities/services provided in the theatres and there should be a difference between one in the multiplex in a city and one in tier 2 or tier 3 town where there is not even AC or a decent projection facility. We want to categorize based on the quality of the cinema hall.
There should be more cinema halls in the state. There are only 900 theatres now whereas there were 3500 when the population was 4 crore. Now the population is 7.5 crore but the number of theatres has come down. That was the reason films ran for 300 or 400 days. This is also a reason for piracy.
What would you be doing on behalf of the Producer Council?
Once the slab rates and percentages are fixed, we want to understand it first with the experts and we would be hosting seminars to educate all on handling the tax. Meanwhile, cinema halls will get affected majorly. We will have to see their response.
Jyothsna Bhavanishankar