The Hindu : Andhra Pradesh / Hyderabad News : Vigilance probe into entertainment tax evasion by film exhibitors

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Andhra Pradesh

Andhra Pradesh - Hyderabad

Vigilance probe into entertainment tax evasion by film exhibitors

HYDERABAD: The Vigilance and Enforcement authorities have begun a State-wide probe into entertainment tax evasion by cinema exhibitors.

This follows detection of a ‘large-scale evasion’ by the exhibitors in city falsely claiming exemption on certain categories of films.

The department’s officers have been tasked to verify similar claims, as several crores might have been evaded, official sources told The Hindu. The government had exempted certain percentage of ET, depending on local area, from the total amount payable and issued an order, revising the rates, on April 22, 2008, in the light of the Supreme Court judgement in Ashirwad Films case.

According to sources, in the city municipal limits, an exemption of five per cent was allowed on the rate payable (20 p.c.) for exhibiting high-budget films produced in the State.

Likewise, 13 p.c. exemption was given for low-budget films produced in the State and seven per cent on movies which were five years old or more or a repeat run of such films. To claim exemption, an exhibitor had to submit a certified copy of the affidavit of the producer of a feature film or a low-budget film along with the certificate issued by the AP Film Development Corporation, whether it was produced in Andhra Pradesh or was a low-budget film.

Verification of year-long records of 22 theatres here by the Vigilance sleuths up to September 2008 showed that exhibitors had not submitted certificates from AP Film Development Corporation and failed to comply with stipulated condition.The sources said in the absence of certificates, it could not be verified whether the film screened was a low-budget one or produced in the State, resulting in irregular claims and short realisation of tax of Rs. One crore. The department has sent an alert note to the Principal Secretary (Revenue) to instruct the Commissioner, Commercial Taxes, to take steps to realise the evaded tax.

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Andhra Pradesh