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Cinema earnings get govt attention

Delhi government is set to bring a new entertainment-tax policy to check evasion of taxes by cinema halls, reports Amitabh Shukla.
Hindustan Times | By Amitabh Shukla, New Delhi
UPDATED ON JUL 27, 2007 12:57 AM IST

The Delhi government is set to bring a new entertainment-tax policy. The main component of the policy will be to check evasion of taxes by cinema halls and to formulate a plan to declare a particular film "tax free".

"Under-declaration of tickets is a fact. We want to computerise the sale of tickets so that the Entertainment Tax Department knows how many tickets have been sold in a particular cinema hall," said a senior official of the department.

At present, a cinema hall management sends the figures of sale of tickets only after a week of the show. By that time, the officials cannot verify whether the figures are correct or not. "We are devising a system wherein the sale of tickets will be known an hour after the show has begun. This will ensure that our officials visit the hall randomly and verify the figures," said the official.

Another element of the policy will be to regulate the practice of giving the "tax free" status to films. The department has decided to constitute a panel of prominent film critics who would see the film and submit recommendations to the government on whether the film should be exempted from tax.

At present, the producer or the distributor of the film organises a show of the film for officials to decide on tax waiver.

"This brings in the element of subjectivity," said the official. This also prevents small-budget films from getting tax waiver. All films made for children and most films made by film societies will be tax free under the scheme.

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