The Tamil Film Industry is reeling ever since it was announced by the State Government that there will be a 100% increase in entertainment tax. Under this dictum, Direct To Home (DTH) services, Indian Premier League (IPL) matches, and films screened in theatres will have to pay an increased amount almost double in taxes.
DTH operators will have to pay 30% of what they charge customers including service tax straight into the governments pocket. The cash cow which the IPL has proved to be will also be brought under the entertainment tax net and matches played in Chennai will be subject to taxation.
Finally. regarding films screened in theatres, for every ticket sold, 30% has to paid as tax and handed over to the government. Earlier it was 15%. In addition to this, a cap has been placed on the amount that can be charged for a ticket (Rs. 120) so that the paying customer is not affected. This new entertainment tax might just cripple the industry especially smaller indie flicks. A delegation from the industry will be meeting the CM, Jayalalitha to ask her to change this decision.