Hyderabad: Chief Minister K Chandrasekhar Rao seems to have shifted his focus on collection of entertainment tax. The government in its bid to curb tax evasion has issued an order to all the 450-odd exhibitors in Telangana, instructing them to submit collection reports to commercial tax officers on ‘daily basis’ instead of weekly or fortnightly from May 1. The government may even decide on a jail term for exhibitors who cheat the government with fudged figures.

According to sources, some of the exhibitors submit fake DCR’s (daily collection reports) to commercial tax officers -- for instance if a film collects house-full collections in four shows and garners Rs 1,20,000 in a day, exhibitors submit a duplicate DCR and claim that the film collected just Rs 30,000 on that day and remit tax for lesser amount.

This results in a loss of crores of rupees to the state exchequer. Industry bigwigs say that some commercial tax officials are hand-in-glove with exhibitors and allow them to pocket crores of rupees meant to go as revenue to the government. Rich exhibitors bribe local officials at the rank of assistant commercial tax officer and district commercial tax officers and get away with cheating.

“We heard that each exhibitor sends Rs 10,000 per theatre to ACTO’s every month and imagine the kind of money both officials and exhibitors are making by hoodwinking government,” says producer Nattikumar, ex-chairman of the producers sector of the Andhra Pradesh Film Chamber of Commerce.  Appreciating the proposed move to crack the whip on tax evaders, Kumar said the government should be firm in implementing the rule so that the nexus between exhibitors and top officials can be broken.  

“From May 1, the exhibitors would be intimating through SMS or email about collections every day to concerned commercial tax officials and those who indulge in fraud will be sent to jail says Vijayender Reddy, president of the Telangana Film Chamber of Commerce. He said though the chamber hasn’t received the said GO yet but officials had visited  theatres and instructed the staff in most of the 450-theaters to  submit collection record on daily basis and send SMS or email to officials. The officials will also conduct surprise raids if they suspect foul play, he said.

However, there are some who wonder if it was really possible to effectively implement the order considering the deep rooted nexus between corrupt exhibitors and top officials. Few exhibitors could have indulged in it, but you shouldn’t blame the entire exhibitors’ community for such mal practices” Reddy adds.

A top producer on condition of anonymity said “First let exhibitors give genuine collection record to producers and distributors who rightly deserve it since we lose 30 to 40% collections in each film, due to fudged DCR’s given by exhibitors, so government should make it mandatory in the order for exhibitors to send daily collection reports, so that we can be assured of genuine returns on our investments,”they add.