The Kerala Story tickets are tax-free in MP, but it isn’t politics-free. Here’s why?


By Ritika, Yudhajit Shankar Das: What is common to The Kashmir Files, Padman, The Kerala Story, Mary Kom, Taare Zameen Par and Qurbani?

You would be wondering. On the one hand, The Kashmir Files deals with the genocide of the Kashmiri Pandits community in 1990, Taare Zameen Par is about inclusive education. On the other hand, Qurbani of the 1980s is an action thriller.

The answer is that all the above-mentioned movies were declared tax-free by some state or another.

Movies aren’t just movies. They tickle us, they titillate, some make us angry and some make us cry. But above all, movies also convey messages, subtly.

Just take the example of Shah Rukh Khan-starrer Chak De India. The film is not just about a bunch of women underdogs winning a hockey championship. The sports drama sends out a strong message on women empowerment and national integration, and goes on to redefine patriotism.

Movies are a powerful tool. They can be weaponised too. And tax-free status to movies is seen as a government’s endorsement of its theme. And a movie being declared tax-free does send out a political message.

But before we dive into politics, we will take a look at economics.

When is a movie declared tax-free? What benefits do the filmmakers and audience get when a movie is declared tax-free in the state? Let us try to understand it first.

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There is no fixed criteria for a film to be given tax exemption. State governments decide whether or not to give up their claim to tax income on a film-to-film basis, based on their evaluation of the relevance of the topics addressed in the film.

“It totally depends on what the government feels. It could be theme, awareness factor… depending from film to film,” says trade analyst Taran Adarsh when asked on what qualifies a film to be declared tax-free.

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When a film deals with a socially significant and inspiring topic, state governments may occasionally exempt it from taxation in order to make it more accessible to a wider audience.

For instance, Toilet: Ek Prem Katha (2017), starring Akshay Kumar and Bhumi Pednekar, which addressed the issue of privacy for women to attend to the call of nature, was declared tax-free by Uttar Pradesh. The film’s unique theme was also in-line with the central government’s Swachh Bharat Abhiyan.

Another Akshay Kumar-starrer, Padman, was declared tax-free by the Rajasthan government. It is a biographical drama of Arunachalam Muruganantham, a social activist who invented low-cost sanitary pads. It addressed the issue of menstrual hygiene, in-line with the government’s campaign.

Filmmakers regard a tax-free status as a government endorsement and a boost to the film’s image and publicity, even if it has no impact on the film’s financial success.

Explaining why declaring a movie tax-free is beneficial for the audience, Adarsh adds, “When ticket rates are reduced, it is beneficial for the audience. A lower ticket price is an incentive to draw people to movie halls, attracting footfalls. If the film attracts the audience, it is good for respective state governments. But the actors do not get any benefits.”

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Before the introduction of the Goods and Services Tax (GST) in 2017, state governments used to levy an entertainment tax, which varied from state to state and was higher in states like Maharashtra and Uttar Pradesh. This entertainment tax was waived if a film was granted tax-free status, resulting in significantly lower ticket prices for moviegoers.

Initially, after the implementation of the GST, a 28% tax rate was imposed on movie tickets. However, subsequently, two different tax slabs were introduced: 12% GST on tickets priced below Rs 100, and 18% GST on tickets priced above Rs 100. The revenue generated from this tax is distributed equally between the federal and state governments.

When a state declares a film ‘tax-free’, now it exempts only half of the entertainment tax, which would be either 9% or 6%, as per the ticket price.

According to cinema hall owners, the declaration of a film as tax-free had a more significant effect before the implementation of the GST, as each state had its own entertainment tax, which could be entirely waived by the state government. However, currently, even for tax-exempted films, moviegoers are still required to pay Central GST.

“After the introduction of the GST regime, things have changed a lot as more stakeholders have come into the picture. When a movie is declared tax-free, it does have some kind of negative impact on the film industry. They can’t collect money from customers but they have to pay distributors, which is detrimental to cinema halls. The working capital and cash inflows of theatres are impacted. Things have changed a lot after the GST came into effect,” says trade analyst Akshaye Rathi.

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If a movie gets a tax-free label, then is it politically free? Is there a shift in the type and genre of movies getting tax-free status before and after 2014? Does politics influence which movies are made tax-free?

“In the past, tax-free films were those that promoted social harmony, family planning and the need for education. The scenario has changed completely. Films that seek to sow disaffection and are divisive are more likely these days to be made tax-free than any other kind of cinema,” Saibal Chatterjee, eminent film critic, told IndiaToday.In.

“I think today it is less about spreading social awareness than about propagating political ideologies. There was a time when political films gave a voice to the voiceless. Today, all that they do is toe the government line,” Chatterjee added.

A controversy erupted after the trailer of ‘The Kerala Story’ was out and it claimed that 32,000 girls from the state went missing and later joined the terrorist group, ISIS. It was severely criticised by the opposition Congress and the ruling CPI(M) government in Kerala, saying freedom of expression was not a licence to spew venom in society, and the film was an attempt to destroy the communal harmony of the state.

The Madhya Pradesh government, ruled by the BJP, on Saturday announced a tax-free status to ‘The Kerala Story’ in the state.

“All movies are political. If a particular regime’s political agenda matches a movie’s ideological position, then the government may think of using the movie for its own purposes,” JNU professor Saugata Bhaduri told IndiaToday.In.

“The more likely possibility is that the film gets made by a filmmaker and the government somehow covertly finds out that a particular movie could be in the interest of its own ideology propagation. In that case, it can choose to make it tax-free. So, that more people watch the movie,” Bhaduri added.

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Eyebrows have been raised over Madhya Pradesh’s granting of tax-free status to The Kerala Story, which has been in the eye of the storm since its teaser was released in November 2022.

“A movie always has a political meaning. There are movies like The Kashmir Files, which promote a particular political agenda. Promoting movies like The Kashmir Files, The Kerala Story is political propaganda. The government providing support to a particular movie is a political decision to advance a political agenda,” CPM leader and former culture minister of Kerala, MA Baby, told IndiaToday.In.

“Non-communal and non-controversial movies, films having aesthetic and cinematic values should be declared tax-free,” he added.

The situation was similar when The Kashmir Files hit the theatres. Riding on overwhelming government support and tax-breaks from several states across the country, the controversial movie became a runaway success.

The Congress, however, accused the government of seeking to spread hatred in society through The Kashmir Files, saying, “India is not a film but a reality. India will not be run by films but by the government’s policy and governance.” Former Jammu and Kashmir chief minister and National Conference vice-president Omar Abdullah also slammed The Kashmir Files.

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“Films that suit the ruling establishment get tax-free status and that definitely helps the films concerned,” film critic Saibal Chatterjee said.


JNU professor Saugata Bhaduri says a change in regime does impact the movies endorsed and given tax-free status.

“Declaring movies tax-free is driven by promoting a political agenda… Why would anyone give up a portion of income without any benefit?” Bhaduri said.

Former Kerala culture minister and CPM leader MA Baby says there’s a shift in movies being declared tax-free since 2014.

“Earlier, a certain balanced civilised cultural yardstick was followed to declare a movie tax-free. That was before 2014. But after the advent of the Narendra Modi dispensation, there has been a de-generation of yardsticks being followed. The government now uses movies as a platform to promote their narrow political agenda,” Baby said.

Despite approaching several BJP leaders, no one was willing to comment on the issue.

But there have been controversies over the tax-free status of movies earlier too.

In his book, When Ardh Satya Met Himmatwala, film writer Avijit Ghosh recounts several instances of politically-influenced, tax-free exemptions in Hindi cinema of the 1980s. Director Feroz Khan’s Qurbani, an action thriller with an overdose of glamour, was one such film.

Avijit Ghosh quotes from Ashish Rajadhyasha and Paul Willemen’s Encyclopaedia of Indian Cinema, “The controversial tax exemption to the film (Qurbani) by the then Maharashtra Chief Minister A R Antulay, who had also extended the same facilities to Feroz Khan’s younger brother Sanjay Khan’s Abdullah, was widely discussed in the media.”

Antulay was from Congress.

Ghosh’s book also mentions a Shatrughan Sinha interview in trade magazine Film Information in December 1984 where the actor-producer reveals how tax exemptions were politicised.

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Shatrughan Sinha says, “While Kalka was granted tax exemption status by many state governments solely on the film’s merits, in Madhya Pradesh I was asked if I had any political influence. I said I don’t want to use my political influence as I was sure that my film has enough merits to qualify it for tax exemption. What is the use of seeking tax exemption for your good films if the only qualification for tax exemption is your political influence?”

Kalka (1983) was a coal miner’s drama produced by Sinha.

The controversy over films being granted tax-free status is neither new nor is it likely to see ‘The End’ anytime soon. Till then, it will be seen as a medium for a message.

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