Curtain falls on Saurashtra theatres

The entertainment tax may have seen a reduction but the sector has not grown in accordance. New players are yet to enter the sector. In the last four years, though new multiplexes have come up across the Saurashtra-Kutch region, new cinema halls are not launched.

Entertainment tax, which was almost 49 per cent till October 2005, reduced to 33 per cent and later, on April 2006, came down to 20 per cent.

But despite the reduction, phenomenal growth has not been registered in the entertainment spots, especially in the number of new cinemas coming up after relaxing tax. With the tax structure being reduced, even the revenue collected vide entertainment tax has gone down.

Increasing entertainment options are one major reason, making survival of existing cinema halls crucial and not allowing low budget operators to sustain in the trade.

"Surprisingly in the last four years, at least 30 cinema halls have downed their shutters across the Saurashtra-Kutch region. We fail to understand the reason behind the closures, which are happening, despite drastic reduction in tax structure in the last three years. Presently, there are approximately 100 cinemas functional across the region," explained VG Kalaria, deputy commissioner, Entertainment Tax Office (ETO) of Rajkot.

Multiplexes have come up across the region, especially around cash-rich spots such as Rajkot, Bhavnagar, Jamnagar and Gandhidham, but most of them are either observing tax-holidays in terms of timespan or tax relaxation on business turnover, as granted to them.

Few have even joined the Gujarat Multiplex Cinema Owners Association (GMCOA) and have challenged the tax demand in court of law and so they have not yet paid the entertainment tax, said Kalaria.

The Rajkot ETO registered an approximate tax revenue of Rs 11 crore for financial year 2004-05, where as for 2005-06 the figure was Rs 8-9 crore. The tax was collected from cinema halls, cable operators and video cinemas operational across eight districts of the region.

The reasons for revenues going down in the last two financial years, was because of reduction in taxes as well as increasing entertainment options.

"As prices of television, video compact disc players and digital video disc players have come down, one can enjoy many choices in the entertainment area and too at ease and a very affordable price compared to the ticket prices prevailing presently," explains Kalaria.