In a move that will bring cheer to the beleaguered film industry, the Rajasthan government has decided to give all cinemas within the state a 100% tax exemption on Entertainment Tax. The exemption will be effective from the midnight of March 9, 2011.
The Entertainment Tax, which varies from state to state, cuts into the profits of the exhibitors and distributors, who are already facing the brunt of the cricketing season and the scant number of releases, resulting in lesser and lesser footfalls in the cinemas. In another relief, the Urban Development Tax, also applicable to cinema properties, has been reduced by 50% in towns with population of less than Rs. 1 lakh.
Many major distributors and exhibitors of the Rajasthan circuit hailed the Ashok Gehlot government’s move as pro-industry. Incidentally, the state of Maharashtra, which is home to Bollywood, has the highest Entertainment Tax levied in the whole of India.