JOHAR’S FILM COMES UNDER CAG SCANNER

New Delhi, Aug. 4: Ranbir Kapoor starrer Ae Dil Hai Mushkil figured in the CAG report with the government auditor asking tax authorities to examine “complete loop” of transactions between different entities related to the movie to verify if due service tax has been levied.

The CAG in a report tabled in Parliament on Friday observed that in two instances films were shot in India and abroad, the payment to artists for the portion shot abroad was arranged from foreign companies and the service was made to look as export of services with no tax liability.

The other was Telugu movie titled Nannaku Prematho.

Ranbir Kapoor acted in Ae Dil Hai Mushkil, produced by Dharma Productions and shot in India and New York.

The CAG said Mr Kapoor received a consideration of `6.75 crore from a foreign company, ADHM Films (UK) based in London for film shot in UK and did not pay service tax of `83.43 lakh treating the same as export of services.

“...There is a need to examine the complete loop of transactions between all the parties (Dharma Productions, ADHM Films (UK) and Ranbir Kapoor) to verify if due service tax has been levied in this case or not,” the report said.

Among others, the report also talks about Red Chillies Entertainment and Eros International Media.

The CAG said it noticed that the distributors realised distribution income relating to publicity and expenses of `50.56 crore during 2012-13 to 2014-15.

The CAG in a report observed that the payment to artists for the portion shot abroad was arranged from foreign companies and the service was made to look as export of services with no tax liability.