While the entire film industries are celebrating the complete exemption of Service tax on films, the clarification issued by Finance Minstry hit their hopes very badly. A press release by the office of Finance Minister P.Chidambaram clarified that the exemption is only limited only to movies exhibited in cinema halls.The actors still have to pay 12.36% as already in the force.
So, the concern is back to square one as levying of Service Tax on actors inflates the production costs exorbitantly as nearly 60 per cent of the production costs of any film go towards remuneration of actors and technicians.
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