Speculation rife over film-star raids

Industry insiders have second thoughts about flaunting production costs and gross collections.

The tax raids on big actors and producers has sent shock waves in the Kannada film industry.

Insiders suspect two recent blockbusters---KGF and The Villain---drew the attention of the income tax department to those in the film business in Bengaluru.

A top actor told Metrolife producers must think twice before flaunting production costs and gross collection figures. “The money that comes to actors and producers after the profits are shared may not be so huge after all,” he says.

Rajendra Singh Babu, director, producer and former president of the Karnataka Chalanachitra Academy, believes the runaway Kannada hit KGF, dubbed into four languages, could have triggered the raids. “People should avoid giving out large numbers without proof. In Mumbai, there is a trade guide system where all theatres have to show their collections. We should have a similar arrangement here,” he says. Talking of money and expensive promotions are not the only way to boost a film’s prospects, he says. “Word-of-mouth publicity is best and has worked for U-Turn and Godhi Banna Sadharana Mykattu.”

Prashanth Sambargi, film distributor, said on Friday the raids could have been triggered by GST evasion by distributors of non-Kannada films in Karnataka. The raids have nothing to do with KGF or The Villain, as reported, he said.

Who was raided?

Actors Shivarajkumar, Puneeth Rajkumar, Sudeep and Yash, producers Rockline Venkatesh (Rajinikanth-starrer Lingaa), Vijay Kiragandur (KGF), and Jayanna. Filmmaker and JD(S) legislator C R Manohar and his brother C R Gopi were also among those raided on Thursday.

It’s PR for Modi: movie expert

Well-known movie critic M K Raghavendra believes the raids are political in nature.

In his words: “There have been raids all over. Some hotel chains in Chennai have been raided and minister D K Shivakumar has been questioned. You will probably see more raids in the coming days. My own sense is that after demonetisation, the IT department has armed itself with an enormous amount of information about where the money is but keeps the information low-key except in the case of politicians such as P Chidambaram and Shivakumar. With elections approaching, the Centre needs to demonstrate that the promise of demonetisation was not false and that even the non-political types are under the scanner. I see this simply as an attempt to demonstrate the fulfilment of a promise. KGF has been in the news across India and its visibility makes it an immediate target. Nothing has been quite as visible in the past month or so in Karnataka. The Centre may distribute the raids widely in geographical terms---a few in every state perhaps---and KGF is a major Karnataka candidate today, considering the noise it has been making.”

S A Chinne Gowda

They act on tip-offs, says chartered accountant

Philips Cherian, chartered accountant, says IT officials act only on specific information, or when they are tipped off by informants.

What he says: “The income tax department gets information about properties sold and investments exceeding Rs 2 lakh. They look up the related names and PAN. If returns are not filed, action is triggered automatically. Banks, sub-registrar offices and investment banks have to routinely report all transactions. Movies supposedly been made at high budgets don’t trigger IT raids because the returns are only filed later next year. Most of the time, the gross collections are openly declared but in reality, only a portion of it is profit.”

‘Raids are part of their job’

S A Chinne Gowda, president, Karnataka Film Chamber and Commerce (KFCC), says this is the first time raids were conducted on the actors and producers in the Kannada film industry. “If the IT department is not convinced about the returns filed then they conduct a survey and do random checks. This is a part of their job. Nobody is above the law and we all have to follow the rules,” he says.