Editorial

Taxing the Living Dead
It's the last thing we needed. Another back-breaking tax to cripple the Mumbai entertainment industry, that’s already reeling under the worst ever resource crunch in its history. From one financially bankrupt entity -- the Maharashtra government to another which seems to be getting there. Slowly, yet surely.

Now, that the notifications have been issued, it’s all become official, too. Four per cent sales tax will now be levied on every transfer of rights, from the actual copyright down to the metallic containers used for the traffic of goods.

And there isn’t even the slightest whiff of ambiguity in the phrasing. It’s a cold, premeditated ploy to milk the industry dry, a draconian levy that’s best fought collectively, rather than in the form of ineffectual letters of "prayer" and "request" from the individual trade bodies.

Only a government that’s bankrupt both ideologically and financially would come up with a desperate, ill-informed tax of this sort. Should the industry’s talks with chief minister Vilasrao Deshmukh on June 11 fail to result in a roll-back of the hideous tax, the entertainment sector must call for a strike as a collective show of protest. Factionalism and egos must not be allowed to come in the way of a joint strike. The entire industry will be affected by the ramifications of the tax. So protest jointly we must.

WE'RE ALL IN IT TOGETHER
One thing’s for sure, all of showbiz will carry the burden of the new levy. Transfer of copyright of all kinds will come under the purview of the tax -- from film and television software to music and video.

The Maharashtra Sales Tax Act on the Transfer of Rights to Use Any Goods for Any Purpose Act, 1985, has now been amended to include Copyright, thus necessitating a 4 per cent tax on it. This isn’t the first time it’s being introduced -- an equally desperate Maharashtra government had done so 15 years ago, only to roll back the levy after a total industry strike lasting a month. It had then appointed finance secretary, Madhav Godbole, to look into whether the tax was justified. The result? He suggested it was not. What’s more, Godbole even reported, "Films are not sold, only the exhibition rights are transferred under the Bombay Sales Tax Act, 1959. Hence there should be no sales tax on the transfer of copyright by film producers." The landmark finding, notwithstanding, the state has now decided to reintroduce the levy it had once abolished.

Either the Deshmukh government has not bothered to delve into history at all, or has decided the altered circumstances justify the levy. Does it really?

Look closer, and you’ll know things have gotten only a great deal worse for showbiz since 1985. The ratio of hits to flops has fallen drastically. Now for every release that manages to break even, there are 30 that don’t. In fact, the distributors and exhibitors who bear the brunt of it all, are at the very brink of extinction, today. After all, how much longer can they continue to bankroll one box-office dud after another?

State Most Hostile to Showbiz
DOES the prevailing regime in the state favour the crunch-hit industry? Well, decide for yourself.

Despite all the fanfare with which industry status was granted to filmdom, the benefits that go with it are yet to trickle down. Electricity and water are yet to be provided to it at industrial rates. Studio and set rentals still cost the producers a tidy packet, with even the state-owned Film City charging a premium for the meagre services it provides. Shooting on roads, beaches and port property don’t come cheap, either, and permission to shoot at public places never comes easy. In the absence of a single window system, that’s being tried out in some states like Andhra Pradesh, Mumbai’s filmmakers have to run from pillar to post getting the sanctions on time.

When other states levy as little as 15 to 30 per cent by way of entertainment tax, Maharashtra charges an exorbitant 60 per cent. Coming as it does, at a time when collections from theatres have hit an all-time low, ET comes like insult after injury. And remember, TV, cable TV and video parlours pay no ET at all. Why then, should films alone be targeted?

Thanks to the prevailing hostile environment, there are hardly around 1100 cinemas in the state, as against more than 2500 each in Andhra and Tamil Nadu.

All said and done, Maharashtra’s turning out to be quite hostile to showbiz, especially when governments elsewhere are proving to be increasingly movie-savvy. That’s why the new sales tax policy seems so short-sighted. Its burden, too, will be passed down the line, to the exhibitor and eventually, the hapless moviebuff. All this, merely to bankroll the jumbo, over-sized state government.

Shaju George Alex