After Gujarat cinemas gets property tax relief, cine owners urge for pan-India solution

Recently, the Gujarat government announced a complete waiver of property tax for cinema houses in view of the disruption brought on by the second wave of the pandemic. That has made way for a debate with exhibitors asking for pan-India solution, and relief package.

It has been over 18 months since the revenue cycle of theatres pumped back to life, and waiting for the big screen revival is getting costly every passing day. And that’s what drives forward the demands.

“The entire theatre sector across the country is losing around ₹400 - ₹500 crores per month. With zero income, the money is only flowing out. It’s lethal. Every state needs to follow what Gujarat has done. It’ll ensure that lakhs of people continue to remain employed and the sector continue to exist,” says exhibitor Akshaye Rathi.

The Gujarat government has also exempted the cinema hall owners from a fixed charge in electricity bill from April 1, 2021 to March 31, 2022. Relief package has been announced for film theatres in Andhra Pradesh, and last week, exhibitors of Maharashtra met state government officials to request them to follow Gujarat’s model.

According to Kamal Gianchandani, CEO of PVR Pictures and president of The Multiplex Association of India (MAI), the second wave has hit the business even harder.

“The first quarter of the financial year has been completely spoiled and it’s somewhere between 30-33 percent of the annual business since it’s a prolific time for cinema exhibition. What Gujarat has done should be emulated by all state governments. They should also consider a relief package as we’re dealing with heavy losses,” asserts Gianchandani, hoping for theatres to reopen early next month.

Adding to it, Kailash Gupta, Chief Financial Officer - INOX Leisure Ltd, says, “Support from governments at all levels in the form of waivers and subsidies will prove to be extremely critical in overcoming the financial stress”.

Besides exemption from property tax, the exhibition sector is urging the government to charge them for electricity as per industry rates and not commercial rates, and grant some leeway in validity of license, and not consider the time when cinemas were shut.

Explaining the math, Devang Sampat, CEO, Cinepolis, points out that there’s a difference of almost 25 percent between the commercial and industrial rate, while trade expert and producer Girish Johar says all this will help them save at least 10-20 percent of the whole cost.

“Since the closure of cinema halls last year, we’ve lost around 1200 screens and that’s a big chunk for almost 8500 screens that are operational. The pan-India solution will give theatre some space to breathe with the country limping back to normalcy. It’ll give a big relief to cinema halls which are on a brink of closure,” stresses Johar.

Gianchandani adds in agreement, “It’s unfair to tell the properties to shut down for no fault of theirs, instead of exempting them from these additional costs.”

Sampat, too, believes that all these exemptions are the need of the hour. “It’ll get tough if the support doesn’t come in. We’re looking at all kinds of relief from food tax to the GST that we pay to help us rebuild the industry,” he says.

Now, as unlock begins, the industry experts are keeping their fingers crossed, and hoping for people to return to the theatres with several films such as Bell Bottom, Sooryavanshi, Chehre, Bunty Aur Babli 2 and Thalaivi, in the pipeline.