The Multiplex Association of Gujarat (MAG) and the Cinematograph Exhibitor’s Association of Gujarat (CEAG) last month jointly decided to diffuse the ongoing tension between producers and distributors of Gujarat on the one hand and exhibitors of the circuit-state on the other by agreeing to increas the percentage share of distributors in the total net collections. The tension is a result of the “unduly high” tax-free service charge of Rs. 25 per ticket which is levied by cinemas. Since the service charge is deducted from the net collections before the sharing can happen between the distributors and exhibitors, producers and distributors have been pleading with the state government to reduce the amount of the service charge.
After a lot of deliberations, the two associations of exhibitors agreed to change the percentage payment to distributors as follows subject, of course, to the national multiplex chains also agreeing to pay the same percentage:
1st week: 50% of net collections after deducting Rs. 25 service charge.
2nd week: 42.5%
3rd week: 37.5%
4th week onwards: 30%
The current percentage payment to distributors is 45% in the first week, 40% in 2nd week, 35% in 3rd week, and 30% from 4th week onwards.
It may be mentioned here that the national multiplex chains have still not agreed to hike the percentage payment as finalised jointly by the MAG and the CEAG. Obviously, therefore, the decision of the Gujarat associations has not been implemented.