Tollywood star Junior NTR on Saturday issued a statement to the media after some reports suggested that he did not pay service tax on the remuneration he received for his 2015 hit film Nannaku Prematho.
“I have acted in (Nannaku Prematho) film in 2015 which was made in the UK by the producer. I was advised by legal and tax experts that any Service (in this case as an actor) rendered outside India for which payment is received in Foreign Exchange, is not taxable for Service tax in India. Accordingly, I have not collected the service tax from the producer of Nannaku Prematho,” he said in a statement.
The Comptroller & Auditor General (CAG) has brought to the notice of Finance Ministry that actors and filmmakers have been using loopholes in the tax policy to evade the service tax obligations. According to reports, the CAG report that was tabled in the parliament has suggested that the actors were paid through foreign companies for the portions shot aboard. Since no tax will be playable on exports of goods and services, this practice apparently allowed the artists in question to save on taxes.
“In 2016 when CAG officials conducted a review of my Service Tax returns and raised a query, my legal and economic team gave an explanation in writing about the same. After sending that written reply in 2016, till date, we have not received any further communication regarding this matter, like a show cause notice or demand, from the authorities,” Jr NTR said.
The latest media reports suggested that the Central Revenue department was contemplating to serve notice to the actor for alleged non-payment of Rs 1.10 crore in service tax.
“If and when I receive any communication from the authorities, I will respond as per the applicable law. I have been a law-abiding citizen and faithful Income tax and Service tax payer for the last several years,” he added.
“I have been complying with all the applicable laws scrupulously in time. I have the highest respect for the laws of this great country India. In the present matter, if it is found by the competent Authority that I have to pay the Service Tax, I will pay every single penny as required of me. I am waiting to hear from the authorities regarding the same,” he said.
It is said that Bollywood star Ranbir Kapoor was also given service tax exemption on the similar grounds for the payment he received for Ae Dil Hai Mushkil.
The CAG, cracking the whip on the finance minister on the matter, has reportedly recommended an investigation into similar cases involving the celebrities.