Orissa cinema halls want Bengal's tax package

The cinema halls in Orissa, reeling under threat of closure due to exorbitant rate of entertainment tax, are looking to West Bengal for a turnaround in their fortunes.

The All Orissa Cinema Hall Owners Association has urged the state government to adopt West Bengal pattern for changes in entertainment tax structure and curb on video piracy for the revival of the industry.

A spokesman of the association pointed out that not so long ago, many cinema halls in West Bengal had closed down due to higher entertainment tax and video piracy. They have now revived following suitable government intervention.

He said, Orissa has one of the highest entertainment tax rate in the country at 20 per cent on net price of the ticket through out the state except six cities where compound tax of 20 per cent is levied on gross house full capacity of 70 shows in a month. The six cities are Cuttack, Bhubaneswar, Sambalpur, Rourkela, Puri and Berhampur.

Comparatively, in West Bengal, the entertainment tax is fixed at 30 per cent on basic admission rates for non-Bengali pictures and 10 per cent for Bengali pictures.

In Orissa, there is no separate tax rate for exhibition of Oriya pictures, thereby stunting the growth of Oriya film industry. The entertainment tax rates in cinema crazy southern states like Kerala, Tamil Nadu, Karnataka, Maharashtra and Andhra Pradesh are also much lower than Orissa while it is nil in Jammu and Kashmir.

Similarly, the cinema halls in Orissa are allowed to collect tax free service charge of only 50 paise per ticket for AC halls and 25 paise per ticket for non-AC halls while the same is Rs three and Rs two per ticket respectively in West Bengal.

For example, from a Rs 20 cinema ticket in Orissa, Rs twelve goes to the state coffers as entertainment tax, leaving only Rs eight for the cinema hall owners to meet the expenses such as electricity bill, salary of staff, maintenance and payment to the movie distributor.

As a result, all the halls in the state are running on loss, pointed out the association spokesman. He added that, out of 250 movie halls in the state few years back, 90 have already closed down while the rest are struggling to stay open. Because of such closures, the government's entertainment tax collection has come down from Rs 4.34 crore in 2001-02 to Rs 3.41 crore in 2003-04.

Some industry members pointed out that a high level committee headed by the state chief secretary had recommended in October, 2002 that the entertainment tax for the cinema halls in the state, reeling under the onslaught of cable TV and video piracy, be reduced to 35 per cent for non-Oriya films and 15 per cent for Oriya films.

But the decision is yet to be implemented, they rued. Unless the government takes prompt action in this regard taking a leaf out of West Bengal experience, all the cinema halls in Orissa will close down soon, further precipitating the unemployment problem, they warned.