Monday, January 21, 2013

FAPCCI & AP Film Chamber meeting on “Service Tax” and related issues organized

Today the President and other important persons of Andhra Pradesh Film Chamber of Commerce, namely Shri Tammareddy Bharadwaja, President, Smt. Jeevitha Rajashekhar, Producer & Director, Shri K.S. Rama Rao, Producer, Shri Burugupally Shivaramakrishna, Producer come over to FAPCCI (The Federation of Andhra Pradesh Chambers of Commerce and Industry) to discuss on the Service Tax matters that are adding additional burden to Film Industry. Shri Devendra Surana, president, FAPCCI, Shri Srinivas Ayyadevara, Sr. Vice President, Shri Shiv Kumar Rungta, Vice President, Shri S. Tirumali, Advisor, Indirect Taxes Committee and Senior Advisor to Deloitte, Shri Abhay Kumar Jain, Chairman, Direct Taxes Committee has participated at this meeting.

 The Service Tax paid to artistes and others by producers are adding to the cost of film production to the extent of 12.36%. The introduction of Service Tax on various services was thought of in the context of bringing about GST regime in the Country. Once GST is in place the service tax paid to artistes in the process of film production will pass on to the ultimate customer that is cine-goer.  But in the absence of introduction of GST the service Tax is not getting passes on to the distributor and exhibitor and finally to the ultimate customer.

Further, the film industry is imposed an entertainment tax about of 15%, those the producer has to suffer the additional expense of Service tax, which is not at the movement a part of the CENVAT. There four it was suggested to make a representation to the Central Government to differ the Service Tax, till such time as GST is introduced. Alternatively it was also suggested to make a representation to the Central Government to give an abatement of 60% of the cost of production of film and levy tax only on the balance 40% of the cost of production of the film. The members of film industry felt very happy about these suggestions, and requested FAPCCI to represent this matter before the Central Government for deferment of Service Tax and / or abatement of cost of production.  

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