Vigilance men swoop down on exhibitors

By BVS Prakash
Hyderabad: The Vigilance and Enforcement Department swooped down on theatres all over Andhra Pradesh and detected tax evasions running into crores of rupees. It found that to evade entertainment tax some theatres were screening dubbed films as Telugu films made in the state. At other places, big budget films were being screened as small-budget films. In some theatres it also found that daily collection reports (DCRs) were not submitted to the commercial tax department for months together. It suggested that the distribution sector be brought into the sales tax dragnet and if they file returns furnishing details about films, theatres and amount received for leasing out prints, it will enable the department to cross check facts with the exhibitors, so as to minimise losses.

The revised entertainment tax for big and small films was 14% and 10% respectively and 24% for other language films, dubbed films and Telugu films shot outside the state. The V&D officials claimed they detected dubbed films like Oke Okadu and Narsimha being screened as ‘straight’ Telugu films to evade 10% ET. Big budget films were being screened as low-budget films to save 4% ET. They also disclosed that the mandatory rule of submitting DCRs to the respective commercial tax department on a weekly basis was not adhered to by some theatres for months together. Since the DCR is the only document to ascertain the ET, the V&E department suggested to the government to include the distribution sector in the Sales Tax Act. Though distributors don’t require to pay sales taxes they can file returns furnishing details such as name of the film, theatre, and area besides the amount and period the print was leased out for. With these records the V&E department can crosscheck with the records submitted by exhibitors and curtail the losses. It also detected that the carbon consumption record maintained by projector operators which contains details about films screened wasn’t matching with the DCR at some theatres.

According to industry sources, a group of MLAs were about to raise the problems faced by the film industry in the forthcoming assembly session. Now, they’re certain to be put on the defensive if the government tables the records of tax evasion by the exhibitors.