Acting on a report tabled by CAG (Comptroller & Auditor General), the national auditor, the Central Revenue department is gearing up to serve show cause notice to NTR Jr on evading tax to the tune of Rs 1.10 crore.
In its report submitted by the Finance Minister in Parliament on Friday, the CAG highlighted the practices adopted by actors and filmmakers to evade service tax obligations. For the films shot abroad, payments to artists for the portions shot abroad were paid through foreign companies and the service was made to look like ‘Export of Services’ with no tax liability.
In the case of NTR, he was paid a remuneration of Rs 7.33 crore by a London-based company in 2015 for ‘Nannaku Prematho’. The actor has been found to have evaded service tax of Rs 1.10 crore on his remuneration citing that his film was shot extensively in London and other foreign nations, and thus his service must be treated as ‘Service export’ with no tax liability.
The CAG also advised the tax authorities to examine the complete loop of transactions among different entities related to ‘Nannaku Prematho’ movie to verify if due service tax has been levied.
Acting on the report, the Central Revenue department authorities plan to serve show cause notice to NTR in this regard.