Tax heat on television serial stars

There is tax trouble for entertainers. The state commercial taxes department has issued notices to eight channels in the state over non-payment of professional tax by actors, crew members of serials and shows being aired in these channels.
It has sought details of all actors, production houses, technical staff, production staff, make-up artists, editors and other staff in the business, schedules of these programmes, and the days they were on air.
“Though every individual, who is part of the serial or television show making is bound to pay professional tax, it has been found that most of them have not paid the tax for years.Hence, as the channels air the end product in the form of a serial and other shows, notices have been issued to channels as they are supposed to deduct and remit the professional tax,“ a senior officer of the commercial taxes department told Bangalore Mirror. The dues by these actors, and others who make the content of these eight entertainment channels are expected to run into a few crores, a source explained. “There are at least forty such serials or programmes from all these channels on air everyday.If one takes an average of fifteen actors from each serial or a show, they make six hundred.Thereafter, the segment has too many support staff, directors, people like dialogue writers, script writers, video editors, etc.Details of all such people, their numbers, their working hours, number of days worked and salary structure have been sought from the channels. Once we get all these details, tax and penalty details if any will be compiled, and claimed through a demand notice,“ the officer explained.
At an individual level, professional tax is an average of over two thousand rupees, a commercial tax department source explained. Except for some big names, who hail from cinema but are in small screen now, most are not complying with this, and notices are being sent, he added.
As per the Karnataka Tax on Professions, Trades, Callings and Employment Act, 1976, professional tax has been specified for every employed and self-employed staff belonging to various professions. For those in motion picture industries, who fall in the selfemployed category, directors, actors and actresses (excluding junior artists), playback singers, recordists and editors who are income tax payees, the PT specified is Rs.2,500. Others are required to pay Rs.1500.Cameramen and still photographers are required to pay Rs.900 per annum. The act also specifies a certain penalty. The production house, producer or the channel, should have registered itself and those unregistered are liable to pay a penalty of Rs.1,000.For non-filing, the penalty is Rs.250 and for those who don't pay tax ­ an enrolled person or a registered employer is with interest rate of 1.25 percent and penalty not exceeding 50 percent of the tax amount due.
“As the penalty for nonregistering and non-filing is very less compared to other taxes like VAT, people tend to oversee this part of the tax system. However, with the industry ever growing, the liability is huge to the state. This drive will also create awareness among those part of serials and shows in the small screen. For now, we have issued notices to eight channels. As the segment is huge and unorganized, no ready data is available. Once the channels respond, the process of tax collection will begin based on the period, category,“ the officer added.