NEW DELHI: Fissures have started appearing amongst the film fraternity on the issue of striking tomorrow to protest the 10.3 per cent service tax, with the Film Federation of India, the apex body of the film industry, reiterating that the plans remain unchanged and the Film and TV Producers Guild wanting that the strike should be deferred.

FFI President Vinod K Lamba told indiantelevision that he did not give any credence to statements being made by some filmmakers in Mumbai that the strike had been called off, and also regretted that some TV news channels had been playing up these statements. He also questioned the locus standii of the persons who had been saying that the strike had been called off.

However, Guild Vice-President Mukesh Bhatt told indiantelevision.com in Mumbai that he wished the best to Lamba, but "let me tell you more than 90 per cent of film folks including the film associations across India and the Multiplex Owners Association are with us and will not take part in the strike tomorrow".

Lamba said the FFI was an umbrella body comprising various industry associations including exhibitors, distributors, producers and single screen cinemas, and had taken a unanimous decision to go ahead with the strike. “The result would be there for everyone to see day after tomorrow. My only plea to people not participating in the strike is that they should not sabotage the protest.”

He said though Finance Minister Pranab Mukherjee had given a patient hearing in a meeting over the weekend, he had declined to give any assurances. However, Bhatt was categorical that Mukherjee had wanted the film industry to wait till after the Budget before taking any decision.

A Guild spokesperson also said messages had been received to the effect that some states like Andhra Pradesh would not be joining the strike. Eminent Tamil filmmaker and FFI Committee member L Suresh is also understood to have advised deferment.

Earlier yesterday after a day-long meeting chaired by Lamba, it had been announced that it was necessary for all film bodies to join the protest to voice their anger to the government.

Lamba had told a press meet that apart from Mukherjee, the Information and Broadcasting Minister Ambika Soni had also met representatives of the industry over the weekend but both had been non-committal.

Apart from the fact that the industry is already over-burdened by other taxes like the Entertainment Tax, the Show Tax, and the state-imposed taxes, it has to fight the menace of video piracy, he added.

The FFI has been asking the Government to waive the tax. But Lamba said: "To its utter distress, the Finance Ministry through a circular of 13th December 2011 clarified that the tax was applicable under Finance Act."

He said that imposition of the service tax would amount to double taxation since the states imposed their own. In any case, taxation was a state subject and, therefore, the imposition of any tax by the centre was unconstitutional.

Lamba said the strike had the full support of all organisations including Indian Motion Pictures Producers Association, organisations of distributors, exhibitors and even exporters. There will be a complete shut down of theatres, and shooting studios on that day all over the country.

Others who attended the meet included South India Film Chamber Secretary Ravi Kottarakara, Arijit Dutta and R S Khemka of the East India Motion Picture Association, A R Raju of the Karnataka Film Chamber, Kalyan of the Andhra Pradesh Film Chamber, Hirachand Dand who is Vice President of the Indian Film Exporters Association, and T P Aggarwal who is Vice President of FFI.

Lamba said that the service tax is generally levied only on the end user, but this was not possible since the rate of admission tickets in cinemas was already very high because of various taxes.

Kottarakara, who is also Convener of the Sub-Committee set up for the strike, said it was unfortunate that the film industry was equated by the government to shopping or gambling with taxes imposed on normal industries, whereas this was a creative field.

It was pointed out that at a time when the number of theatres had come down to under 11,000 for a population of over a billion people, the government should have helped to help build more theatres.

The negative list concept of service tax and the definition of ‘service’ therein intend to consider ‘right to enter any premises’ as an activity liable to service tax. This endangers the box office collection to be eligible to service tax of 10.3 per cent which is already taxed by high rates of entertainment tax. The new approach of negative list continues to consider film distribution rights as liable to service tax.

The power to levy taxes on luxuries, including entertainment has been exclusively granted to state governments under entry 62 of the State List of the Constitution. The Empowered Committee of the State Finance Ministers on 9 and 10 January 2012 had suggested that all items mentioned in the State List of the Constitution (including entertainment tax) should be included in the negative list so the Centre cannot impose tax on them. Thus, even state governments agree that service tax should not be made applicable on right to enter any premises.