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K.V. Kurmanath

Hyderabad , Oct. 26

SOME exhibitors who live on the make-believe-world of films try to make the Commercial Taxes Department believe that some of the dubbed films screened in their theatres were real direct films, to avoid higher Entertainment Tax.

Pilferages due to this kind of evasions are mostly intangible, leaving the Department poorer by sizeable revenues.

In a bid to curb the practice, the Department is coming out with a software solution that would make the lives of erring exhibitors miserable. "The software would keep track of the details of the films released," Mr T. Vivek, a senior official of the Department, told Business Line.

"We are in the process of preparing a software which helps us verify the veracity of the claims made by the exhibitors. We are going to have a systematic approach to improve the revenue stream from this segment and plug leakages," he said.

The Department has tied up with the Film Development Corporation for the purpose. "As soon as the details of the films get recorded, the information will automatically get deposited in our database. This will help us book those on the erring side," Mr Vivek said. A pilot project is expected to be out in two-three weeks.

In the present system, the Department would make copies of the information sent by the FDC to various offices, involving huge manual labour.

The obvious reason for the exhibitors hiding the truth is higher taxation for non-Telugu films.

While theatres in urban areas attract 24 per cent for dubbed and Hindi films, those in Panchayats and touring theatres are charged 14 per cent and 12 per cent respectively. The figures for a high-budget film produced in the State are 12 per cent and 3 per cent and one per cent respectively. For the low-budget films, the figures are 10 per cent, one per cent and one per cent respectively.

In several cases, the exhibitors try to pass the dubbed films off as direct Telugu movies to keep themselves in the lower taxation regime. The Department treats a film with prints not exceeding 35 as a low-budget film.

The local bodies get 90 per cent of the proceeds, while the FDC receives seven per cent and the Department three per cent. Pilferages in Entertainment Tax would, thus, mean a big dent into the earnings of the local bodies.

Interestingly, the incidence of misrepresentation of films is more when it comes to some popular actors, whose name goes well with local viewers.

Collections go up

The collections under the Andhra Pradesh Entertainment Tax (APET) head have witnessed a 100 per cent growth in the last 13 years.

While the receipts in 1990-91 were Rs 37.98 crore, the figure rose to Rs 78.18 crore during 2002-03. The figure went up by 12.10 per cent over last year's Rs 69.74 crore.

The APET turned around from a decline of 23.71 per cent during 2000-01, when collections fell to Rs 60.17 crore from the previous year's figure of Rs 78.87 crore.

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