GST could harm Telugu Cinema!

Good and Service Tax bill that will bring an unique and single tax applicable system through out the nation over the existing state based tax system, looks like a big pocket stealer of a Telugu Cinema Fan.

In two telugu states, Telangana and Andhra Pradesh in the existing system, the Entertainment tax on Films has been permitted and restricted upto 15% and GST is proposing 28% Entertainment tax all over the nation. This means increase in ticket prices in two Telugu states. No distributor, exhibitor and producer will reduce their profit share or income and we can't expect an already heavy loss business like Single Theatres to pay 28% tax on existing ticket rates. They will definitely plan to increase the ticket rates and Telugu Cinema Fan might have to bare the brunt.

Already, Telugu Cinema Industry has been in doldrums from past few years with a success rate less than 10% and one or two films that manage to collect more than 60 crores in big productions are only been able to make profits. Many small films are ending up becoming disasters with lack of audience at the theatres. With a base rate of Rs 80/- at towns for Balcony and RS 100/- in cities, audience have stopped entertaining new films that lack any buzz or popular star cast. And imagine these base rates increasing by 15% and even those young audience who look to encourage any kind of movie under any pretext but might just decide to spend that money on data packs to watch more movies online.

Well, GST is helpful in states like Bihar, Jharkhand, Maharashtra where Entertainment tax is high but in Telugu states and Tamil Nadu, this is a nightmare. Tamil Cinema benefit more from Entertainment Tax exemption imposed by government on all movies that have a Tamil title, but now whatever might be the title, they will have to pay the tax for sure. Well, the only solution one can draw is regional cinema might have to aim big like Baahubali or concise their production costs and dependent more content than glamour.