It is a very good move by the Govt.If producers have no problem in making films cost 100 cr. then what is the problem in paying tax.The actors also earning very high compared to common people.They spend much for their luxuries while common people are struggling to make a living out of their fixed earnings.The most corrupted people are from film field.They are helping underworld to convert black money into white.Many actors made defaults in making tax payment and so on.This decision had to be taken before.
In business terms, a film is end product of a temporary enterprise. This enterprise consists of lots of contractors including actors, directors and production team. All these contractors either pay income tax or corporation tax based on their involvement.
The product (film) is itself taxed at cinema level when it is played.
Putting service tax on actors income is like taxing every employee who works in any organisation producing product or service.
Today they are asking actors to pay service tax, tomorrow they will do same for employees designing and developing cars? who knows!
Crux of matter is about divide between central government and state governments. All income tax goes into kitty of central government whereas collection from cinema halls go to local governments. So state government is not getting much income even though they host largest industry.
I think most taxes should be shared between central, state and local governments appropriately so they are not constantly inventing ways of getting more money out of people.
Service tax goes to State so state wants to enjoy more films will move to other states where lower taxes or no tax..bollywood's next destination would be dubai or delhi
