Home Top Story Producers, exhibitors fleece movie goers and made crores of rupees

Producers, exhibitors fleece movie goers and made crores of rupees





D. Bal Reddy

The producer and exhibitors of Balakrishna starrer Gautamiputra Satakarni pocketed the tax exemption given by the Telangana and Andhra Pradesh governments taking the movie goers for a huge ride.

It may be recalled the state governme

ts of Telangana and Andhra Pradesh have exempted entertainment tax for the movie.
As per the exemption, the rates of admission fee for the movie shall not exceed 75 percent of the existing notified rates of admission fee to each class of the theatre. But, the exhibitors, in gross violation of the condition, are collecting the regular rates of admission fee from the movie goers without giving the benefit of tax exemption.

Sources in the Commercial Tax department said the exhibitors subsequently claim tax exemption while filing returns and pocket the money collected from the movie goers towards the entertainment tax.

About 1200 theatres – small and big – operating in the two Telugu states are under the control of four big shots of the film industry. The benefit of exemption of entertainment tax goes directly to them, the sources said.

The sources also said that

t the Telangana government did not even issue an order exempting the entertainment tax. Instead, the government gave instructions to the department, which are very vague.

Taking advantage of this, the exhibitors have simply sold the tickets at normal notified rates and collected 15 percent entertainment tax from the consumers but the tax amount was pocketed by the four big shots, sources said.

A judicial activist, CVS Raghunatha Rao, said that, “Some people in the film industry are resorting to financial irregularities causing huge loss to the exchequer and also fleecing the common people.”

There is no point in giving tax exemption to big budget films. It is nothing but helping the producers and the exhibitors’ mafia fleece the people and also evade tax, he said adding that these people are making hundreds of crores by evading taxes.

“I am aware of this and I have already written to the government to clarify on the rates of admission fee to be collected by the exhibitors. The instructions given in this regard are not clear,” Commissioner of Commercial Taxes, V Anil Kumar, had said.

He also said that the exhibitors should not collect entertainment tax from the consumers if the governments exempt entertainment tax. However, the exhibitors and producer of the movie pocketed crores of rupees as the government did not act on the issue.

Asked about the steps taken by the department in connection with the Telugu feature film ‘Rudrama Devi’, for which Telangana government has exempted entertainment tax, Anil Kumar said they need to verify the returns filed by the exhibitors.

Reacting on this, judicial activist, Raghunatha Rao said, “By the time the government gives clarity

, the exhibitors fleece the people and pocket the money collected towards entertainment tax.”

The state government has not even issued a GO. This is only to favour the producers and the exhibitors because they will subsequently claim tax exemption at the time of filing returns with the help of instructions thereby denying the benefit to the consumers and also causing loss to the exchequer, he said.

Interestingly, sleuths of the Income Tax department swooped down on the offices and other locations of three film personalities connected with the Balaiah starrer Gautamiputra Satakarni.

The simultaneous searches come in the wake of allegations that the producer, distributor and exhibitors have gained illegal benefit exploiting the entertainment tax exemption given for the movie.

According to sources, the searches were conducted at the offices and other locations of the movie director Krish, producer Rajiv Reddy and Nizam area distributor Sudhakar Reddy.





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