On behalf of the Indian film fraternity, the Film and Television Producers Guild of India has argued for a GST (goods and services tax) rate of 5% for making the film industry more lucrative as a business to invest in. Over the years, film business has suffered due to multiple and indirect taxes levied at various stages of film production and exhibition. Under GST, on the other hand, taxable goods and services would not be distinguished from one another and taxed at a single rate by a sole authority in a supply chain till they reach the consumer. The Guild believes 5% is an adequate benchmark.
“Currently, the weighted average tax on Rs 100 for a movie is actually just Rs 7. Anything more than a 5% rate would be damaging to the industry because that would be more than the 7% that we’re at,” said Siddharth Roy Kapur, president of the Film and Television Producers Guild of India.
Kapur emphasized that the need is to develop the Indian film industry as a soft power and present it to the world as a unique cinematic culture that has preserved itself and grown despite the inroads Hollywood has made into the market, a feat not many countries around the world can boast of.
To be sure though, there are more than a couple of trends currently pointing to the deteriorating health of the film business. Despite a detailed analysis of the pressing issues faced by the industry sent to the government, cinema found no mention in the Union Budget that came out earlier this month. Compared to 146 crore admissions in 2009, footfalls in cinema theatres fell to 118 crore in 201 6 despite a growing population. On 12 January, 2017, Mint reported that box office collections in India had fallen by 10-15% in 2016 as compared to 2015.
Recorded screen density is abysmal, according to the KPMG-FICCI report of 2016, India has more than 8,000 screens (including over 2,000 multiplex screens) with a screen density of six per million people, compared to 23 per million in China and 126 per million in the US. The crisis is further aggravated with the common man increasingly succumbing to piracy, several big-ticket 2016 releases including Dangal, Fan, Sultan, Airlift and Udta Punjab
having fallen prey to it. Apart from top-level talent in the industry, actors and directors, everyone else in the value chain, from the studios to the producers to the distributors to the exhibitors, has had a tough year, Kapur admitted.
“Obviously there is tremendous opportunity (for the film industry) to grow,” Kapur said, adding that communicating the 5% rate as the benchmark to the government was an important goal. “But that growth will only happen if we get support in terms of regulation as well as taxation.”
Live Mint, 13 February 2017