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GST & It's Effects On Punjabi Film Industry : Here's What The Producers & Distributors Have To Say




By: Prakriti | July 11, 2017

We are all aware of this new tax reform by the Modi government called GST: Goods And Service Tax. Though it's all over the media for being a tax that'll unify the country but there are those who feel that it'll simply quantify cost as well as paperwork, therefore, increasing confusion.

While many regional industries have backlashed at this new tax reform which will increase the production cost of smaller regional movies, there are others who feel that it will have it's own benefits. Regional industries are worried because GST is now even being accounted for those payments which are done to hundreds of vendors, most of whom worked earlier on cash, the cost of production would be sky high and not many makers would now dare to invest in movie making.

 Entertainment is a big part of our lives. Most of us who work hard through the entire week want to go out, watch movies or visit some new places to relax on our days off. As of now, Punjabi industry is still developing and in a state where the entertainment tax till now has been nil, here's a new law that's giving everyone jitters. 

We talked to a few of the top most directors and producers of Punjabi film industry about the effect of GST in this part and here's what they had to say:

 

Munish Sahni (Producer/ Distributor - Omjee Group) : "GST will definitely create a dent in Punjabi film industry because if cinemas will increase the admission rate, the foot fall will decrease. And if they don’t increase admission rates, it will affect the share of the producer. Punjabi cinema is currently growing and taking baby steps and GST will badly affect the business of Punjabi films in Punjab especially, where entertainment tax was zero earlier."

 Karaj Gill (Producer - Rhythm Boyz) : ”GST  has many folds in itself. Earlier we used to pay the artist his fee including service tax and we couldn’t claim it anywhere but now with GST we have sources to claim it. There is demolition of entertainment tax but the funny part is that the major market that we cater to is Punjab which, till date, had no entertainment tax. The state was tax free. We won’t be having much effect but yes, it’s pretty tough to understand this new reform."

Sumeet Singh (Producer/ Distributor - Unisys/Saga) : "Na ched tu darda nu, main tho dasya ni jana! Punjab is tax free in entertainment section and as producers we collect 48 percent of the gross collection. For instance, we get 1 Cr return from the movie, 28 lacs will go as tax and what many are unaware of is that we have a reverse charge also. We have to go and file GST for people like spot boys and other technicians who don’t have a GST number but are giving small services, which is again a very tedious job for the makers. As we make payments to them through cheque, we deduct their GST and they criticize us for doing that. This time the tax burden is heavy on the makers and we have to start Subedar Joginder Singh next month. We are still understanding how to go about the tax issue. In layman’s language, if the budget of the movie is 8 Cr, we end up paying an extra 2 Cr as tax, which is really heavy."

Amiek Virk (Producer - Nadar Films) : “Application of GST is still not clear to us. There are many small nitty gritties that we are still looking into. All I have to say at present is that the paper work has increased to three folds and it is pretty chaotic. Three returns in a month takes a lot of time; also the small technicians who are involved in the making are completely unaware of it and need to be helped at all points. Doing so much paper work would take a lot of time and I think that time should be used for creative work. But the reform is a one in its kind and I am sure it will have great effects in long term."

Ranjha Vikram (Producer/Actor - Running Horses Films) : "By implying GST,  the tax rate is going up. The fare of the tickets would be dearer which is a negative aspect for a growing industry. Surely many will think before spending a bomb on the tickets which might as well lead to us losing out on the audiences." 

Vivek Ohri (Producer/ Distributor - Ohri Productions) : "There are many pros and cons to the tax which has been implied. Its difficult to understand and imply at this point of time. One of the major points is that our industry is new and we are in a growing stage; a tax free state suddenly has to pay taxes! Also, our movies are diverse. We have different shooting locations and for each place we need a GST number. For instance, my Punjab GST number won’t work in Delhi and so on, due to to which the paper work increases and one has to run for these tasks before focusing on the creative aspect. The movies which recover from the box office collection would get tax refunds and others might not.The twist is that we all know many movies don’t recover. Why be harsh to them on the tax angle?? It is de-motivating for the producers!"

We have been getting public opinions as well but for now, the future of Punjabi film industry is certainly on a rocky ride. Let's hope that the government understands the hitches of a growing industry like ours and provides relief to those who are putting their heart and soul into making Punjabi industry a global asset.

 

 

 

 

 



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