By Lynne Gardiner Digital Cinema Report India Correspondent A planned strike by all single screen cinema owners in the state of Maharashtra India has been postponed following the outcome of a meeting between representatives from the Cinema Owners and Exhibitors Association of India (COEAI) and government ministers. Single screen cinema owners across the state had threatened to close their doors indefinitely in protest against the 45 percent entertainment tax that they are required to pay and the strict change of use regulations that prohibit cinema owners from starting up new businesses on their land. R V Vidhani president of the COEAI and vice president of the Film Federation of India confirmed that following the meeting which involved several government departments he is now hopeful of achieving a good outcome to the situation. “All procedures are complete and the issue will now go to cabinet ” said Vidhani. As Digital Cinema Report first reported in October single screen cinema owners in the state of Maharashtra the home of Bollywood intended to close their doors indefinitely in an attempt to abolish government-imposed entertainment tax and to modify existing ‘change of use’ rules that apply across the state in the corporation area. The strike promised to hit hard with its message as it would coincide with what is traditionally an important time for the cinema industry in India with several festivals including Diwali and a host of much-anticipated movies due to be released. Currently single screen cinemas in Mumbai the financial capital of Maharashtra are handing over 56 percent of their revenues in taxes including a hefty 45 percent entertainment tax while multiplexes have been granted a five-year exemption period. Some states in India have abolished entertainment tax altogether and give incentives to promote cinema while many cinema owners in Maharashtra are finding the taxes unbearable. Commenting on the decision to strike then Vidhani said “We’ve had no help from the government whatsoever and the situation now can no longer be tolerated. Not long ago there were 1 080 single screens in Maharashtra but many have closed down and many more are on the verge of closing. The various taxes imposed in the state are too much of a burden. “We are striking to make the point that the current situation is unfair and unless the rules are changed many more single screens will close. This will mean that the majority of Indian cinema-goers will be unable to visit cinemas as their budgets simply do not enable them to pay the higher prices charged by the multiplexes. With the film industry in India relying on the lower and middle class masses going to the cinema it’s easy to predict that the whole industry will suffer greatly if the single screens continue to close. The situation is particularly poignant with India celebrating 100 years of its film industry which took birth in single screen cinemas. These have now become the dead nails of the film industry at this juncture.” However the tax rules were only half the story behind the proposed action. The strike also sought to force the government to ease its ‘change of use’ rules that apply to cinemas in Maharashtra. Currently single screens have no choice but to use their prime locations as cinemas: once a cinema always a cinema. The rules provide no options for existing owners to develop their cinema sites by starting up new businesses themselves or for subsequent generations who may not be interested in the cinema business. “We would like to see the government offering a package of incentives to support existing single screen cinema owners and to help new single screens to be opened up ” concluded Vidhani. Promises have been made by ministers in the past concerning entertainment tax and land use regulations but this time the single screen owners appear to be putting up a cohesive front in their demands for change and are adamant they will strike unless progress is made in their favor. Certainly if the strike were to go ahead everyone would feel the effects: the loss of revenue from ticket sales would deliver a critical blow to single screen owners as many are already struggling to remain open; the government would lose all tax revenues it currently generates from the single screens; and a large percentage of the cinema-going public would be denied access to new film releases. For many people in India the higher prices charged by the multiplexes are unaffordable. Potentially the whole industry would be affected. The hope now is that cabinet ministers will find a solution acceptable to the single screen owners thus enabling them to keep their doors open or to allow those that are already in financial hardship to redevelop their businesses as they see fit.
