Eight leading actors and a few film distributors of Malayalam cinema, who together have evaded payment of Goods and Services Tax to the tune of around ₹20 crore, are facing legal proceedings.
The intelligence wing of the State GST department, which had confronted these actors with the statements given by the producers and distributors of their movies over the last few years, have estimated the tax evasion by the actors as around ₹8 crore.
The single largest evasion was by a young prominent actor and his evasion was estimated to be around ₹4 crore. The evasion by the distributors accounted for around ₹12.5 crore. The highest evasion was found committed by a distributor based at Thiruvananthapuram, who accounted for evading tax to the tune of ₹4 crore, according to sources.
The revenue earned by those in the cinema industry including the actors and technicians come under the ambit of the GST regime. The income earned for the service offered by actors by way of acting in movies and advertisements, stage shows, appearance in various programmes, endorsement of products and becoming brand ambassadors are taxable. The sector comes under the 18 per cent tax net, sources indicated.
The tax evasion by the actors surfaced during the investigation against the distributors. The actors were supposed to acknowledge the receipt of the remuneration from the producers and distributors, which in turn had to reflect in the annual tax statements of the latter. However, the reluctance of the actors to acknowledge the remuneration received had landed the producers and distributors in trouble. There were also indications that part of the remuneration to some actors were paid using unaccounted money. Around 30 leading producers and distributors, who were investigated by the department, spilled the beans, sources said.
Though the tax evaders were directed to pay the tax, it failed to evoke a good response as only ₹50 lakh was remitted as tax. Once the formal notices are issued to the defaulters, they will be liable to pay a fine up to 100 per cent of the taxable amount and face prosecution, sources indicated.
