HYDERABAD: Tollywood superstar G Mahesh Babu's two bank accounts were attached by the Hyderabad GST commissionerate Thursday, in connection with a service tax evasion case pertaining to year 2007-08. In order to recover a sum of Rs 73.5 lakh, which amounts to tax evaded, penalties and interest, the GST commissionerate attached his bank accounts in Axis bank and ICICI bank under Section 87 of the Finance Act 1994 .
The 43-year-old actor's contention for past 10 years was that the money he received as compensation was not taxable as they were not for services provided by him, but towards his accommodation, air fare etc. The GST commissionerate has maintained that the actor failed to pay service tax for remuneration received as brand ambassador, paid appearances and advertisements promoting various products.
The total due at the time was Rs 18.5 lakh, which he contested and refused to pay, said officials at GST commissionerate, Hyderabad. "A sum of Rs 37 lakh is due for last 9 years and interest for the period has accrued to Rs 36 lakh. We have recovered Rs 42.9 lakh from the actor's Axis bank account, and attached ICICI bank account. If the bank fails to credit the required sum to government by Friday, we will take action," said an official. The actor's ICICI account has a balance of Rs 1 crore and it is upto the bank to debit the amount due to government as per section 74 of the Finance Act 1994.
According to officials, Mahesh Babu was issued a show cause notice in 2010, which he challenged with the Commissioner (appeals). After he was asked to pay up the dues, the actor approached the Central Excise Service Tax Appellate Tribunal and in June 2018, lost the case. Further, he filed a petition before the Hyderabad High Court in September 2018, where in the HC upheld the tribunal's order.
"Coercive action was required as the actor continued to contest this case of tax evasion for several years. Tollywood celebrities including producer Dil Raju, D Suresh Babu have paid up their dues earlier this year when they were asked to," pointed out the official.
Mahesh Babu who started his career as a child artist in 1979, has been active in Tollywood from 1999 and has given several Tollywood hits. He has been actively endorsing several products for years. He has 7.5 million followers on Twitter and 2 million followers on Instagram.
On December 26, he wrapped up schedule of his upcoming flick 'Maharshi' and tweeted, "Schedule wrap for #Maharshi, a much-needed fun evening with friends & family!" with "hashtags #whatmorecaniaskfor #holidayseason and #december".