Coronavirus: Cinema operators seek exemption on taxes, loan moratorium for one year

Cinema operators have requested the government for exemption on statutory dues and loan moratorium for one year, as the sector has been hit hard with many state governments ordering closure of multiplexes in the wake coronavirus outbreak in the country.

Cinema exhibitors have also asked for a waiver of the minimum demand charges on electricity by several discoms, said Multiplex Association of India (MAI) in a statement.

"The developments due to the outbreak of COVID-19 in the previous six to eight weeks have made us run into possible bankruptcies,” said MAI in a letter written to the government.

MAI also said that the exhibition industry is facing "extremely adverse times" as the average footfalls has come down by 30 per cent since February.

“While the virus fear was pulling down the footfalls drastically, the cinema closures directives issued by all the state governments brought the business to a calamitous standstill," it added.

From March 12, 2020, when the first directive was issued by the Kerala government, till March 17, 2020, the entire multiplex industry has came to a halt, with virtually every state government directing closures.

“In a space of less than five days, all the 3,500 multiplex screens across the country were closed for operations,” said MAI adding in the "absence of revenues, the cashflow has completely stopped, resulting into extreme distress".

The cinema exhibition industry provided direct jobs to close to two lakh employees.

“Being a manpower-intensive industry, salaries form a massive operating expenses, which has remained constant in these times. Over and above the salaries, rent and maintenance charges, electricity charges and other administrative charges have delivered a massive blow to the cash position of the multiplex operators,” it added.

Seeking a relief, MAI has asked to provide interest free loans for three years with one year moratorium to multiplexes immediately to help them tide over this period of crisis and prevent any kind of default on salaries, electricity dues, loans & interest repayments etc.

It has also asked for “exemptions on all taxes - including GST, Show Tax, Local Body Entertainment Taxes and Property Taxes for one year from the date of resumption of normal cinema operations”.

It further said that MAI would support the 'Janta Curfew' initiative and will continue to raise awareness about the coronavirus pandemic.

Total Number of screens in India stood at 8,750, of which 3,100 are in multiplex and rest 5,650 are single screens. MAI operates 3,100 screens including both multiplex and single screen format.