Jamshedpur, April 28: The hall owners across the state may heave a sigh of relief with the state commercial taxes department finally deciding to slash the rate of compounding tax from 39 per cent to 24 per cent.

Officials of the state commercial taxes department said the slash in the compounding tax rate would be notified in a couple of days.

The tax enforced in 1985 was providing an extra burden as it was calculated on the basis of a housefull capacity for the whole week. Under the provision, whether it was housefull or not, sale was 50 per cent or 25 per cent, the hall owners had to pay a fixed compounding tax in advance.

However, in an attempt to save the theatre industry, the state commercial taxes department has come up with a new compounding tax structure. Under the new tax structure, hall owners would have to pay less than half of what they were paying earlier.

Additional commissioner of state commercial taxes department, J.K. Das, speaking to The Telegraph, said department would notify the new tax structure within a couple of days.

According to him, in the new compounding tax structure, theatres have been categorised into four types ? A,B,C and D ? according to the density of population.

Moreover, the highest slab of compounding tax was reduced from 39 per cent to 24 per cent, while the lowest slab was slashed from 10 per cent to eight per cent, he added.

Cinemas in the areas with a population exceeding five lakhs have been kept in category-A, while those with a population between five lakh to 2.5 lakh has been kept in category-B.

Theatres in areas having a population between one lakh to 2.5 lakh have been categorised C, while those in areas with a population up to one lakh have been bracketed in category-D.

Under the new structure, halls in ?A? category will now have to pay 24 per cent of the gross collection for 20 shows per week, while ?B? category halls will have to pay 14 per cent of the gross collection from 18 shows on a weekly basis.

Theatres falling under category-C will have to pay 11 per cent of the gross collection from 15 shows, whereas ?D? category halls will have to pay eight per cent of the gross collection from 12 shows. Earlier, the hall owners had to pay for the housefull capacity for 28 shows per week.

The Jharkhand Film Exhibitors? Association (JFEA), the apex body which looks after the affairs of the cinema industry in the state, has welcomed the decision.

President of JFEA, Harinarayan Parikh said, ?The move by the state government has given a fresh lease of life to the theatre owners. The government?s initiative will not only save the show business in the state but will also motivate others to open new theatres, thus adding to the revenue of the state exchequer.?

According to Gopal Agrawal, owner of Deshbandhu Talkies, the hall owners will now be able to provide good facilities to theatre lovers.