Two powerful groups — liquor manufacturers and film producers — are lobbying with the top brass of the state government for certain benefits for themselves at the cost of the public and state exchequer.
While the liquor manufacturers are pressuring the government to enhance the basic price of liquor that will automatically lead to an increase in the maximum retail price, the film producers have revived their demand for exempting films from the value-added tax (VAT).
The price negotiation committee of senior state officials will hold a series of meetings with the distillers from Tuesday on the price issue.
Sources have said that the liquor manufacturers, particularly those from other states, are seeking a hike in categories with the basic price of Rs 450 and above per case. “The state made tall claims about efforts to ensure MRP for the benefit of consumers. With the hike in basic price, the MRP will go up, neutralising these efforts,” the sources pointed out.
On the film industry front, a delegation of film producers has recently met Chief Minister N. Kiran Kumar Reddy, who handles the commercial taxes portfolio, to represent their case. The delegation later claimed that the Chief Minister was convinced about their demand to scrap VAT.
The sources said that the Chief Minister would soon convene a meeting with the finance and commercial taxes departments to study the impact of granting the exemption.
“The state will lose anywhere between Rs 125 crore to Rs 150 crore per annum,” the sources pointed out. The state could earn high revenues with the new trend of releasing films with a large number of prints. The Mahesh Babu starrer Dukudu would have netted Rs 4 crore in taxes, given the producers' claims of releasing the film with 1000 prints, the sources said. As per the VAT rules, films released with more than 151 prints are liable for tax of Rs 40,000 per print.
The commercial taxes department has been prevented from using stringent measures, such as collecting taxes through processing labs and stopping the release of films for the non-payment of tax. “Now a new theory is being floated that there is no need to retain a tax which is never collected,” an official stated.