Intermission: Post GST, TN must lift price controls on movie tickets

With higher taxes post-GST, Tamil Nadu must lift the price controls on cinema tickets

Taxes are of two kinds. A progressive tax can be an instrument of state policy, yielding benefits for the many at the expense of a few. But a tax can also be debilitating. A higher rate can sometimes be counterproductive, restricting the growth of the sector, and eventually resulting in lower revenues. With the introduction of the Goods and Services Tax, the Tamil Nadu film industry is squeezed on every side;in protest, cinema halls across the State have downed their shutters indefinitely. What is hurting is not the 28% GST on tickets priced above ₹100, or even the 30% levy imposed by local bodies as entertainment tax, but the fact that these come on top of the existing State government-imposed cap on ticket rates. The cap of ₹120 means that the exhibitors might earn more from their lease of cinema space to popcorn vendors than from screening the film. Indeed, given the differential rates, the exhibitor might not be able to earn much more from charging ₹120 for a ticket than he could from charging ₹99. Increasing tax rates while maintaining an overall price cap makes no sense at all. Governments are free to not incentive's certain services or forms of consumption. However, in this case, the end result of the squeeze on the margins of exhibitors and distributors is making the entire film industry unviable. The price cap on tickets was sought to be justified on the ground that otherwise there would be exploitative premiums charged on keenly awaited films during the early days of their release, when demand runs high. It was believed that this protected members of fan clubs of popular film stars, most of whom are from the lower social strata. But with the piling up of different taxes, it is the exhibitors who are at the wrong end of the exploitation.

Although some Tamil films qualify for exemption from entertainment tax, on account of their ‘social messaging’, such certification depends all too often on pulling the right political strings. In an industry where politicians of every hue are involved, tax exemption has been open to widespread abuse. Local bodies have not earned much from entertainment tax, but what the government loses in terms of revenue, the party in power gains in terms of power and influence over the film industry. Given that the GST rates cannot be altered, being fixed nationally, the sensible solution is to give up the price cap on tickets and reduce the entertainment tax. Price caps on tickets have inhibited the building of new cinema halls in Tamil Nadu, even as old ones shut shop. Also, if the government’s true objective is to safeguard the interests of the filmgoer, then it must be ready to forego tax revenue. The lesson that Tamil Nadu needs to understand is that a high rate of taxation can be debilitating in a price-controlled situation. Source : THE HINDU


1) Debilitating (किसी को दुर्बल बनाना) (adjective):  de-bil-i-tat-ing
Meaning - – making someone/something very weak.
Synonyms -  exhausting , enervating
Antonyms - Refreshing , strengthening , power giving
Example - Cancer is a debilitating disease.

2) Counterproductive (उल्टा ,प्रतिकूल )  (adjective): coun-ter-pro-duc-tive
Meaning - resulting in the opposite of the looked-for effect
Synonyms -  undesirable/unfavourable, adverse, destructive , useless
Antonyms -Effective , useful , harmless
Example - Eating a gallon of ice cream is counterproductive to your diet.

3) Strata  (स्तर) (noun): stra-ta
Meaning -a layer of material/something, naturally or artificially formed.
Synonyms -  level, class, echelon/rank.
Example - It is possible for social inequality to exist without social strata.

4) Hue ( रंग, पहलू, प्रकार) (noun):   hue
Meaning - a shade of color
Synonyms -  character, aspect, type , tint
Antonyms - whole,  full
Example -  As I stood on the balcony, I tried to take a photo of the hue of the setting sun.

5) Exploitative    (शोषक , अनैतिक)  (adjective):-  ex-ploit-a-tive
Meaning - making use of a situation or treating others unfairly in order to gain an advantage or benefit.
Synonyms -unprincipled, unethical, disreputable.
Antonyms- Ethical , genuine . right
Example - This price tag feels exploitative of the huge child audience that the game has.

6)Pile-up (ढेर लगाना)(noun) :  pie-l-up
Meaning - an accumulation of a specified thing.
Synonyms - accumulation, heap ,  collection  ,bash
Antonyms - Dissemination , diffuse , distribution
Example -  I saw a pileup of e-mail messages after my vacations that needed to be dealt with

7) Pull the strings  (प्रबंधन, नियंत्रण) (Phrase):  
Meaning - to use your influence in order to get something that you want or to help someone, especially when this is unfair
Synonyms -  control , conduct , direct
Antonyms - Relinquish , renounce , give up
Example -He had pulled strings in order to get his son into the college.

8) Inhibit (रोकना)  (verb)  : in-hib-it
Meaning -  to prohibit from doing something
Synonyms -  Hinder , restrain , prevent , obstruct
Antonyms - Encourage , assist ,promote
Example -You shouldn't allow fear of failure to inhibit you.

9) Squeeze ( बल, दबाव, निचोड़ )(verb):  skweez
Meaning - to firmly press
Synonyms - compress , crush , force , pressurize
Antonyms - Uncompress , decompress , assuage
Example - After adding the sugar, squeeze and crush the lemon in the pitcher for homemade lemonade

10) Tumultuous(Noun)  - उथल-पुथल      Meaning -involving a lot of violence, confusion, loudness or disorder
Synonyms - Turbulence , wild , noisy
Antonyms -  peaceful , calm , orderly
Example (English) - The president said later in a telephone interview with The Associated Press, "We're passing through a tumultuous economic period."
Example (Hindi) -एसोसिएटेड प्रेस को बाद में टेलीफोन पर दिए गए साक्षात्कार में राष्ट्रपति ने कहा, "हम आर्थिक उथल-पुथल के दौर से गुज़र रहे हैं"।

Now considering the article above as a Reading Comprehension , try to answer the following questions-
  • Which two types of tax are mentioned in the passage? Define both of them as per the passage.
  • What solution has been suggested in the passage for the price control on movie tickets?
Now it's time to check your vocabulary . We have given below some words from the same article . Try to make sentences with these words in the comment section which will be reviewed by us.
  • Forego
  • Unviable
  • Awaited
  • Discrete

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