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01-18-2013, 04:57 AM #1
- Join Date
- Sep 2011
Bollywood is an 'industry' in name only: Resul Pookutty
... says Resul Pookutty, who is set to appeal to the Appellate Tribunal against a Service Tax judgment that went against him
The Service Tax debate - of whether actors, filmmakers and producers should be under the ambit of the Service Tax as per the latest government directive - is nothing new for Oscar-winning sound designer Resul Pookutty.
He has been fighting this in court for over a year. For rendering sound recording services, the I-T department demanded a recovery of 14.65 lakh as S-T on his earnings for the financial years 2006-2011, with a penalty of 200 per day or 2% of the S-T liability per month, whichever is higher, with the amount not exceeding the demanded amount.
In 2012, he filed a case and the initial Service Tax ruling went against him. The S-T rulebook says that sound recording is under the S-T purview. But Resul, who has studied law, won't let up, and says, "The Act does not define the job. My fight is that my job is to conceptualise sound for a film, and after I am done, is when recording begins. So, I am conceiving an artistic impression of sound."
Resul is set to appeal to the Tax Appellate Tribunal now, and has cited the example of an earlier Bombay High Court ruling, in 2010, that gave 'dress designer' Tarun Tahiliani a reprieve, and certified him an 'artist', thereby removing him from the ambit of applicability of Service Tax on his earnings (This ruling has become a benchmark for Service-Tax issues. Sachin Tendulkar, when he filed for exemption from S-T for his earnings from endorsements, also stated this case, and ironically, at that time, the court deemed Sachin an 'artist' because his endorsement money came from his 'acting'.)
"I am currently in a sub-judice situation, with some judgment prima facie that has gone against me. The S-T department has imposed huge fines on me and I am waiting for redressal," says Resul, "The law pertaining to this is phrased in such a way that there is no way out of it. I had initially appealed to the Service Tax department, but the ruling went against me, and now, my appeal to the Tribunal is pending because I am in the process of filing the case. I'm citing a Bombay High Court ruling which gave Tarun Tahiliani an exemption on income tax for design work."
He adds, "Bringing the industry under the Service Tax ambit is unjustifiable, because to begin with, we do not benefit from any aspect of being an 'industry' as other industries do. Bollywood is an industry only in name, and whether it be tax-exemptions, preferential exemptions, or when it comes to ***** or legal matter, we are never given the benefit of being an 'industry' because the government has never given us an 'industry' status within a legal framework. We are just loosely termed as the 'film industry'. We have been asking to be deemed an industry, but the plea hasn't been heard. Secondly, most of the work we do here, is largely artistic activities, which have been deemed and defined as 'artistic' through various case laws and procedures by the High Court, and rules laid down by lawmakers. But the S-T department is not willing to accept any of those. And the law is ambiguous in many areas. For example, the exhibitors, who are earning from what we have produced, do not have to pay service tax. So why up only our production costs? It is indie filmmakers who will suffer the most. Also, the law states a musician is an 'artist'... but then a Bollywood composer is not? It talks of cricketers, it does not make the same law applicable to IPL players. This needs to be addressed first. Clearly state the laws."
The Tarun Tahiliani case
The Bombay High Court in 2010 stated that a fashion designer is an artist and dismissed the appeal filed by the Income Tax (I-T) department challenging the tax exemption granted to him, on his foreign income under Section 80RR of the Finance Act, 1969. Section 80RR refers to Indian authors, playwrights, artists, musicians, sportsmen and actors who receive income from foreign parties for their work. In such cases, under Section 80RR, 75% of the total income obtained from the foreign government is exempted from tax. Tarun had sought a tax exemption under Section 80RR, for earnings for the financial year 1999-2000, on his declared taxable income of 83.90 lakh in his returns submitted to the I-T department on October 31, 2000. And the I-T department had argued that Tahiliani is not an artist and supported its claim by showing what was written on him in Wikipedia.
01-18-2013, 05:01 AM #2
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