As multiplexes grind to a halt, sector seeks govt relief

Meenakshi Verma Ambwani New Delhi | Updated on March 22, 2020

Demands interest-free loans, tax exemptions

Multiplex Association of India (MAI) has urged the government to give a relief package to the industry, including interest-free loans and exemption on taxes and duties, to tide over the impact of the Covid-19 outbreak.

By March 17, within just five days, the entire multiplex industry had to suspend operations in adherence with the directives of State governments.

“The developments due to the outbreak of Covid-19 in the past six-eight weeks have made us run into possible bankruptcies,” MAI stated.

Fear perception

“We believe that movie lovers will remain apprehensive and stay away from cinemas, even after the State governments direct us to resume regular operations. While we will be committed to maintaining the best hygiene standards, we still foresee the fear perception remaining prevalent for a period of six months after normalcy is restored,” MAI added.

In a letter to the Prime Minister, Finance Minister and the Information & Broadcasting Ministry, the Multiplex Operators Association stated that the shutdown has brought the industry to a nil revenue situation, where cash flow has stopped but operating expenses, including staff salaries, electricity bill and rent charges, continue to be paid by these companies. This has brought a “ massive blow to the cash position of the multiplex operators.”

The multiplex industry has sought interest-free loans for three years with one-year moratorium to prevent any kind of default on salaries, electricity dues, loan and interest repayments.

“Based on the average annual operating expenditure of ₹1.5 crore per screen, a loan of ₹25 lakh per screen may be the base for computing the total loan amount for all the impacted screens in the industry, considering two months of complete shutdown/disruption,” MAI stated.

Tax exemption

It has even sought exemption on all taxes, including GST, show tax and local body entertainment taxes, property taxes for one year “from the date of resumption of normal cinema operations.” Other relief measures include waiver of the minimum demand charges on electricity and electricity duty for one year. “Provide assistance to cinemas by reimbursements of employee salaries for the non-operational period to the extent of 75 per cent for non-operational period,” the MAI letter stated.

The Association stated it will be carrying out precautionary measures in a sustained manner once operations are resumed, including seat separation, seat allocation capping, enhanced hygiene efforts and planning intermissions in a manner that intermissions of two shows do not happen concurrently.

Published on March 22, 2020

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