Service Tax Hike: Bollywood Threatens To Go On Strike, Hunger Protests

The Government has done it again! As per recent media reports, the Government of India has decided to impose a 12.36% service tax on all film and television actors. Not surprisingly, our Bollywood actors and producers are furious, and are up in arms trying to challenge the verdict with a strike.
The Government has done it again! As per recent media reports, the Government of India has decided to impose a 12.36% service tax on all film and television actors. Not surprisingly, our Bollywood actors and producers are furious, and are up in arms trying to challenge the verdict with a strike.

MUMBAI: The Government has done it again! As per recent media reports, the Government of India has decided to impose a 12.36% service tax on all film and television actors. Not surprisingly, our Bollywood actors and producers are furious, and are up in arms trying to challenge the verdict with a strike.

We interviewed several major producers and actors on their opinion on the issue. Across the board, the unanimous feeling was that of disappointment and anguish over the government directive. A lot of the film personalities felt they would strike; to make their voice heard against what they feel is an unfair tax hike.

The service tax will take effect from this month itself, and film and TV actors will be charged 12.36 per cent service tax on their earnings from film, TV shows and endorsements. This indirect tax will be over and above the direct income tax they pay. Producers are worried that they will have to bear the brunt of this arbitrary hike.

Even Akshay Kumar has reacted negatively to the news of the hike. He said, in a group interview: “A lot of films are closing because of this (service tax)… and due to this many (independent) producers have locked their door from making films. Now there are only big producers and corporate producers who are making films.” Akshay himself has two production houses – Hari Om Productions and Grazing Goat Pictures – feels “our industry pays a lot of tax…this should not happen.”

“I am sure the government knows the best. But this (strike) will tell the government that whatever is happening is not right. We should try and remove this; this will help to make more movies.” He urged the media to take up the issue, saying: “Media should talk and write about the service tax as it is not right, especially for the producers.”

Said Mukesh Bhatt, president of the Film and Television Producers Guild of India (FTPGI): “We are in a process of deciding that if we have to call for a shut down. It’s not our choice; we are compelled to do so. We are having a meeting soon and then we will decide about it.”

The new tax news is most certainly dampener for the Indian film industry, which is in its centenary year. Added Ramesh Taurani of Tips: “It saddens me that in the 100th year of Indian cinema, we should be celebrating, but how can one celebrate with this burden and the insensitivity of the government (towards film fraternity). I am extremely saddened (with the service tax decision) and we can’t take this burden anymore. The war is still on and we are looking at a negotiation with the government. The government has no feelings towards the Indian film fraternity.”

Mr. Kamal Gianchandani, President, PVR Pictures, feels: “The service tax hike is most detrimental to the health of the business in the long-run. As it is, the entertainment industry is plagued by multiple taxes – be it corporate taxes, entertainment tax, state taxes (which vary from state-to-state), show reel tax (tax on each show) and other indirect taxes including VAT and service tax on purchase of equipment, props etc. So by taxing creative people, who are the soul of the film industry, it is extremely unfair. Moreover the burden will have to be passed on to the end consumer, which is again harmful for the country as being entertained should not be viewed as a harmful activity like that of smoking/ gambling. Why should the public be penalized for wanting entertainment? This is a most unfortunate, regressive outlook by the Govt.”

Further, on being asked if he supports the ban, Mr. Gianchandani stated: “We stand by the producers in their decision to call for a strike, and as exhibitors we support them. We only hope that better sense will prevail and the Govt will change their decision to hike the service tax.”

The South Indian film fraternity too is disturbed by this development, and on Jan 7, leading actors, directors, theatre owners and others went on a hunger-strike in Chennai demanding the service tax be abolished. Tamil superstar Rajinikanth too joined the day-long hunger protest.

We tried contacting superstar Shah Rukh Khan and ace filmmaker Karan Johar, but they were unavailable for a comment.