Hyderabad: Exemption from entertainment tax (ET) used to be given to select films, which meant lower ticket prices. But now, both the Telangana state and AP governments have started exempting “historic” films from entertainment tax for the benefit of producers, not cinema audiences.
The film Gautamiputra Satakarni, starring Nandamuri Balakrishna, brother-in-law of Andhra Pradesh Chief Minister N. Chandrababu Naidu, was exempted from ET by an order of the AP Government on January 9. The TS government had issued a similar government order a day before.
In October 2015, ace producer and director of Rudhramadevi, Gunasekhar, had approached both the Chief Ministers seeking ET exemption for his film on the grounds that Rudhramadevi is a historical biopic that brings to light the glory, grandeur and triumphant role of the 13th Century Kakatiya Maha Samrajyam.
Chief Minister K. Chandrasekhara Rao had constituted a committee to look into the request and a GO was issued in October 2015 granting the required exemption.
Sop not meant for moviegoers
A request was made by Balakrishna when he met TS CM a few days ago and obtained the required tax exemption for his film. The TS Chief Minister even conducted a puja launching Gautamiputra Satakarni at Annapoorna Studios. The AP government also gave an exemption to the same film and issued orders on Tuesday. However, a key point behind the exemption given to Rudhramadevi and Gautamiputra is that the benefit of such exemption is not passed on to the audience. The purpose of exempting a film from ET is to bring in larger audiences by offering tickets at a reduced price. But for these two films, the benefit will be passed on to producers of the films. For big films with huge budgets like these, the ET is 13 per cent. “If the collections for the movie crosses Rs 100 crore, 13 per cent of the ET amount will be paid back to the producer,” said an official.
“There is nothing wrong in seeking ET exemption. I have made the film on a budget of Rs 80 crore,” director-cum-producer Gunasekhar said. He did not clarify why he and not the audience should benefit from the exemption.
