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Saturday, October 10, 1998

State exempts Satya from entertaintment tax again 

Sanjay Jog  
MUMBAI, Oct 9: The ruling Shiv Sena-BJP government in Maharashtra, in yet another populist move, has granted entertainment-duty exemption to Verma Corporation's box-office hit Satya for the second time. The state is believed to have incurred a loss of about Rs 15 crore following the first tax exemption granted in July this year.

According to government estimates, the revenue loss has been calculated as follows: entertainment-duty tax on each ticket- Rs 40, capacity of theatre on an average- 800 to 900 seats x 3 shows per day x 30 days. Assuming 15 prints are taken of a film, the amount comes to Rs 4.32 crore a month assuming a theatre capacity of 800 seats and Rs 4.86 crore for 900 seats.

Satya, which takes a look at the Mumbai underworld, has proved to be a runaway hit. Actor Manjo Bajpai, who plays Bhiku Mhatre in the film, has become a household name.

Sources said that the tax exemption was granted despite strong objections from the state's revenue, finance and cultural affairs departments. Therecent sound round of exemption, taken on Wednesday, is significant as the limit for the first one was to expire on Saturday.

The departments objected to the exemption, as the film has been running to packed houses and therefore required no patronage from the state. They have added that it would be diffcult to justify the exemption when other producers have been denied the same. This is because the revenue department has clamped a ban on any exemption through its order on September 11.

As per circulars issued by the revenue and finance departments in July and September, it was mandatory for the sanctioning department to refer the file to the finace department as "tax exemption involves revenue loss to government." The exemption granted to one film can also lead to demands from other film-makers to seek similar exemptions.

The government had already granted a similar tax-exemption to two films Major Saab, featuring Amitabh Bachchan, and Dushman. However, similar proposals from the producers of Jai Hind,Dil Se, Pyar To Hona Hi Tha, Anyay Hi Anyay, Ek Tha Dil Ek Thi Dhadkan and Jakham is still awaiting approval. Sources said that unless uniform standards for entertainment-duty exemption were laid out, it would be difficult for the government to justify "why a select few producers are given exemption."

These departments have sounded out a warning that some producers may seek legal recourse. "The government should not find itself in an embarrasing position for want of sufficient justification for rejection or acceptance."

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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