Byelections, GST seen delaying cap on multiplex ticket prices

The upcoming Assembly byelections in Karnataka coupled with the GST regime have delayed the implementation of the state government’s decision to cap ticket prices in multiplexes at Rs 200.

“There is no clarity over classification of taxes and admission rates. The government machinery is busy in the by-elections. Hence the delay,”

D R Jayaraj, vice-president (Exhibitors), Karnataka Film Chamber of Commerce (KFCC), told DH.

The announcement on capping the tickets was made by Chief Minister Siddaramaiah in the state budget for 2017-18. He also stipulated that multiplexes must screen Kannada and regional-language films during prime shows of 1.30 pm, 4.30 pm and 7.30 pm. The new rules should have come into effect on April 1, which marks the beginning of the new financial year.

Jayaraj said the Goods and Services Tax (GST) regime, which comes into force on July 1, could be another reason for the delay. “The government may be buying time,” he added.

The Karnataka Cinemas (Regulation) Act which deals with cinema halls is being amended. The additional rules — capping the ticket prices, and compulsorily screening of Kannada and regional-language films — have to be inserted in the entertainment rules of the Act by way of a government order. The deputy commissioner of each district, who is the licensing authority, will then issue an order specifying the date of implementation.

Rajendra Singh Babu, film maker and chairman of Karnataka Chalanachitra Academy, said officials of Home and the Commercial Taxes departments were busy modifying the Act. “The amended Act could be submitted to the Cabinet after April 10. It’s just a matter of time,” he said.

Sa Ra Govindu, president, KFCC, echoed him. “In all probability, ticket prices will be capped in two weeks,” he said.

Multiplexes seem to be confused about the implementation of the decision and are trying to impress upon the government to reconsider it. “We discussed the matter after the budget. We have no problem in capping tickets at Rs 150 for Kannada films, but charging just Rs 200 for non-Kannada films is difficult,” a supervisor at Cinepolis multiplex said on condition of anonymity.

According to him, half of the ticket price goes to the distributor while taxes account for 33%. A multiplex gets just 17%. “We will get just Rs 34 if the price is capped at Rs 200. Managing overheads such as electricity bill and staff wages will become difficult,” he said.

The supervisor said multiplex managements had no plans of going to court but were likely to make a representation to the chief minister. They had tried to take up the matter with government officials immediately after the budget last month but didn’t get a positive response.