After the Goods and Services Tax department attached two bank accounts of actor Mahesh Babu for allegedly not paying service tax, his legal team on Friday accused the GST Commissionerate of lapses, and claimed that the due amount of Rs 18.5 lakh for which they levied a penalty of Rs 73.5 lakh was non-taxable.
The legal team said that the department carried out the attachment without prior notice, and also claimed that Mahesh Babu had several judicial pronouncements in his favour, though these were not elaborated on. The statement added that brand ambassador services were made taxable only from 2010.
"The GST Commissionerate Hyderabad has attached the bank accounts for a disputed tax demand of Rs 18.5 lakhs claiming Rs 73.5 lakhs towards Tax interest and penalty for brand ambassador services rendered in FY 2007-08 which was not taxable service," the press release reads.
"The brand ambassador services was brought in the statute by insertion of section 65(105)(zzzzq) with effect from 1-7-2010. The GST Commissionerate Hyderabad has carried out the attachment without notice when several judicial pronouncements on this issue is in favour of the taxpayer and more so when the dispute is pending before the High Court," it adds.
On Thursday, two bank accounts of the Telugu superstar were attached by the GST Commissionerate for not paying the due service tax of Rs 18.5 lakh for 2007-08. The department said, "For services, which the actor rendered, like appearance money, advertising, promoting products and brand ambassador among others, which are taxable, were not paid."
The department attached his Axis bank and ICICI bank account for an amount of Rs 73.5 lakh towards tax, interest and penalty. After attaching his bank accounts, the GST Commissionerate recovered Rs 42 lakh.
Officials through a press release had said that the 43-year-old actor cannot operate his bank accounts until the tax dues are settled.
Presently Mahesh Babu is shooting for Maharshi, which is directed by Vamsi Paidipally. It is jointly produced by Dil Raju, Ashwini Dutt and PVP. Though the film was supposed to release on Sankranti, it has been postponed to April 9, 2019. After Maharshi, Mahesh is likely to work for a film directed by Sukumar.