CORONAVIRUS EFFECT: MULTIPLEXES DEMAND EXEMPTION FROM STATUTORY DUES, LOAN MORATORIUM | 23 March, 2020

The Multiplex Association of India has requested the government to grant exemption to multiplexes from payment of statutory dues and a loan moratorium for one year in view of them being hit hard due to the closure ordered by various state governments in the wake of the feared coronavirus outbreak in the country. The MAI has also asked for a waiver of the minimum demand charges on electricity.

The MAI, in a letter to the government, has said, “The developments due to the outbreak of COVID-19 in the previous six to eight weeks have made us run into possible bankruptcies.” It also said, the exhibition industry is facing extremely adverse times as the average footfalls have come down by 30% since February. “While the virus fear was pulling down the footfalls drastically, the cinema closure directives issued by all the state governments brought the business to a calamitous standstill,” added the MAI letter.

“In a space of less than five days (from March 12, the day on which the first directive for cinema closure came from the Kerala government, to March 17), all the multiplex screens across the country were closed for operations,” said MAI, adding that in the “absence of revenues, the cash flow has completely stopped, resulting into extreme distress”.

“Being a manpower-intensive industry, salaries form a massive operating expense which has remained constant in these times. Over and above the salaries, rent and maintenance charges, electricity charges and other administrative charges have delivered a massive blow to the cash position of the multiplex operators,” added the MAI communication. Seeking relief, the MAI has asked the government to provide interest-free loans for three years with one year moratorium to multiplexes immediately to help them tide over this period of crisis and prevent any kind of default on salaries, electricity dues, loans and interest repayments etc. It has also asked for “exemption on all taxes including GST, show tax, local body entertainment taxes and property taxes for one year from the date of resumption of normal cinema operations”.

India has a total of 8,750 screens, of which 3,100 are multiplexes while the rest (5,650) are single-screens. The MAI operates 3,100 screens including both, multiplex and single-screen formats.

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