Indore Commercial Tax Department will conduct separate hearings in the matter of large scale tax evasion by major multiplexes of the city. According to sources in the department, PVR Cinemas, Naman Inox, Velocity and Mangal Ad labs have been found evading `28 crore of entertainment tax.
The investigation of two multiplexes PVR and Mangal Adlabs is complete and very soon the order will be passed for recovery of the evaded amount. Hearing on other multiplexes is also likely to be completed soon. These multiplexes were found to be involved in tax evasion after the department inspected their premises few months back. Notably, the Commercial Tax Department got the authority of recovering entertainment tax from April 1in 2011. To promote investment in the sector, the department decided to give tax rebates in the first five years of operation of the multiplexes.
Under this, the first three years was completely tax free. In the fourth year, 25 per cent tax and in the fifth year 50 percent tax was to be deposited in the department. However, under the tax rebate scheme multiplexes were required to provide facilities of food zone, video parlor and play zone. The commercial tax department had issued order of recovery from the multiplexes, but the multiplexes owners challenged the order in High Court.
The commercial tax department has to recover around `5 crores from Mangal Adlabs. Assistant Commissioner of Commercial Tax R K Tiwari told The Pioneer that from the year 2007 to 2012, these multiplexes have collected more than `28 crores but did not deposit any tax.