Y. Mallikarjun

HYDERABAD: Canteens in hundreds of cinema halls across the State selling snacks, cool drinks and other items are not complying with VAT regulations, investigations by sleuths of the Vigilance and Enforcement wing have revealed.

Following a petition by the city-based ‘Cine Prekshakula Viniyogadarula Sangham’ alleging that the canteen owners are charging higher prices than the MRP on soft drinks and other items, the department launched an enquiry covering the State.

“Reports show that a majority of the canteens are not VAT-compliant and have not registered with the Commercial Taxes Department”, official sources told The Hindu. Under the VAT regime, a canteen with an annual turnover of Rs.5 lakh and above has to be registered.

While the enquiry is on in the city, reports show that not a single canteen has been registered in Warangal, Khammam and West Godavari districts, while only a theatre canteen was VAT-compliant in Nellore district. In Visakhapatnam, five of the 12 theatres which were checked have been registered.

However, some cinema halls which were not VAT-compliant in Chittoor district, have been found to be having less than Rs.5 lakh turnover. In Guntur, some canteens have not been registered though they have more than the stipulated turnover.

High volumes

Cinema theatres in the State are of particular interest as the canteen sale volumes are quite high here. Though the compliance levels are expected to be better in the city, suppression could not be ruled out, the sources added.

Depending on the availability of records, the dues could be collected from the time VAT was introduced in the State three years ago. Once complete details from across the State are received, the department would be sending a report to the Commercial Taxes Department asking it to bring the canteens under tax net and collect the dues, the sources stated.