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Katrina Kaif not to pay service tax

New Delhi/ Chennai, Jan 9 (): Katrina Kaif has been exempted from paying service tax of Rs 2.79 crore, an interest and a penalty of Rs 34 lakh by the indirect taxes appellate tribunal.

The revenue department had made this claim that this amount was made under the account head of ‘advertisement agency service’ category and not ‘business auxiliary service’, which covers modelling services.

The tribunal ruling which will set a precedent to the entertainment industry said she will not have to pay service tax on her modelling assignments as her agent paid the same. Though it was paid under a different category, it cannot be taken as taxes not paid. By this ruling, it makes it legal for agents of actors and others related to the industry to make the service tax on their behalf.

Matrix India Entertainment Consultants who handles Katrina Kaif’s modelling assignments receives the payments on her behalf and as instructed, they paid the service tax.Citing technicalities, the revenue ministry demanded money from Katrina R Turcotte, aka Katrina Kaif. She appealed before the Customs Excise and Service Tax Appellate Tribunal (CESTAT) who dismissed the case saying mere technicalities did not mean she did not pay taxes and that the agent had correctly discharged the liabilities of the client. The liability of the agent in paying service tax so far was limited but this ruling will give it more scope.

Two days ago, Tamil filmdom organized a protest meet in Chennai against levying 12.6% service tax on actors and performing artistes. Rajinikanth who spoke at the meet said that steep taxation always leads to evasion and this money turns into generation of black money.

Exhibitors and distributors have been exempted and the actors who spoke said that the Union ministry is thinking every actor is leading a luxurious life. This section is only a minority and the majority are those who did not have work most part of the year.