Service charge

TAX-FREE SERVICE FEES: GUJARAT FILM INDUSTRY DIVIDED





Gujarat film industry is like a house divided. While producers and distributors protest against “very high” Rs. 25 duty free service charge per ticket authorized by the state government to cinemas for upkeep and maintenance of cinemas, exhibitors are demanding a further increase of Rs. 10 in the same.

Just recently, film producers and distributors in Gujarat have written to the government asking them to reduce the duty-free service charge allowed to exhibitors. It should be noted that no other state government allows theaters to charge such a high amount per ticket for service fees. Since exhibitors in Gujarat can legally deduct Rs. 25 per seat from net collections to calculate distributor’s share, producers and distributors are at a loss as sharing with exhibitors is after Rs. 25 per ticket is withheld cent percent by exhibitors. But the strange part is that the Multiplex Association of Gujarat wrote on July 23 to the state finance minister asking him to revise the service charge from Rs. 25 to Rs. 35 per ticket. A similar letter was also written last month.

It would be interesting to see what the government’s position will be on this issue — will it reduce service fees, as producers and distributors are asking, or will it increase fees, as exhibitors want? Or will he just maintain the status quo?






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