The Kannada film industry is estimated to have lost more than 200 crores in about five months in the reign of Goods and Services Tax (GST). Apart from this, the commercial tax department, based on the data generated so far, believes the tax reduction in entertainment segment has dropped by 30 percent.
"We expect to reduce the production of the film," said Umesh Bannar, vice-president, Karnataka Field Chamber of Commerce (KFCCC). The release of the GST by the end of this year will be able to cross 200 mark.
Regional films in Karnataka, which enjoyed entertainment tax exemption, now have to compete with other films due to GST. The government, which promises to reimburse the Kannada film industry, has failed to do so so far.
Incidentally, the eight-decade-old Kannada film industry has set a record in 2016 with the introduction of 180 films, and has been a small industry in Tamil and Telugu industries.
"So far, more than 160 Kannada Fields have been released and this year is expected to reach 190. If they were not for GST and Mudradian, then 50 other films would have been made and released, and turnover Rs 500 Exceeding a million mark. "
Most manufacturers, exhibitors and distributors believe that shortly after the process of promoting the Kannada film industry, the GST began to be brought out, which also affected the industry. Producers are not in a position to get a refund of the input tax paid under GST.
"If a producer makes a film with Rs 2 crore, it will have to pay the input tax. However, due to the problem with the tax system, the credit of the input tax can not be obtained against the tax," says P.H. Baba, producer of Kannada films, distributor, exhibitor and finance.
"The earliest production in the Kannada film industry is no money, the production has increased because new producers are coming up with the project, the film industry has floated, these manufacturers can also get out due to fear of higher taxation and declaration," Thomas D'Souza, exhibitor And former president of KFCCC said.
Dipping into the tax collection
"The income generated from entertainment tax is declining, the data has dropped by 30 percent, both multiplexes and single screens are affected," said an official of the Commercial Tax Department.
Sources said that the entertainment tax collection for April, May and June was ₹ 35 crores, while the collection decreased for August 26, August and September.
Tax officials said that due to technical problems, we can not accurately calculate entertainment tax collection.
The state wants to leave the center 8% CGST
The Kannada film industry is upset with the state government to fail to comply with the promise to save Kannada films, which was exempted from entertainment tax before the GST regime. Regional films in Karnataka are enjoying exemption for the past two decades.
KFCC delegation met Chief Minister Siddaramaiah to help the Kannada film industry. However, expressing his helplessness, the Chief Minister received the release of Finance Minister Arun Jaitley and 8% CGST, which will help him to get rid of the remaining 8% of SGST, "Vice President Shri Umesh Banarar said. KFCCC
He explained that the Kannada film industry is not ready to compete with films in other languages.
"Although Mr Siddhmaiya had agreed to charge 5% tax on films in other languages, the officials failed to implement it" SV Rajendra Singh Babu, President, Karnataka Chalanachitra Academy.
Sources in the Information and Public Relations Department said that the proposal is in line with the finance department.
Entertainment tax
* At one time, all the movies displayed in Karnataka were 110%
* To promote Kannada films, the successive government reduced the rate to 30%
* In the mid-90s, Kannada, Tulu, Koda, Konkani and Lemni films were exempt from this tax.
₹ Income of Rs 243 crore in the last financial year
* Six states have exempted films from tax in local languages
* Do not entertain in 10 states
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