The Indian Express reports that VRG Digital Corporation Pvt Ltd along with some other domestic companies undertook circuitous transactions to “defraud” the British Film Institute to access the tax rebate
The name of a firm linked to Vijay Ratnakar Gutte, the director of The Accidental Prime Minister, which is facing a tax probe in India has cropped up in the United Kingdom as well for allegedly indulging in ‘circuitous transactions’ with a few domestic firms to ‘defraud’ the British Film Institute.
The Indian Express reports that VRG Digital Corporation Pvt Ltd along with some other domestic companies undertook circuitous transactions to “defraud” the British Film Institute to access the tax rebate. The IE report is based on court filings.
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The British government allows up to 25 per cent tax rebate for films qualifying as British films. However, there are some obligations on the film production firms to avail this concession. They should be within the UK corporation tax net and at least 10 per cent of the expenditure should be spent in the UK. The tax concession is available on the actual expenditure incurred in the UK or 80 per of total filmmaking expenses.
However, the Directorate General of Goods and Services Tax Intelligence (DGGSTI) has found some irregularities in the transactions made by VRG Digital Corporation to claim the tax relief. According to the report, DGGSTI has filed a remand application in a local court in which it claims that VRG Digital Corporation, Bombay Casting Talent Management Pvt Ltd (BCTMPL) and Horizon Outsource Solutions undertook circuitous transactions to show higher quantum of money invested by BCTMPL into The Accidental Prime Minister.
BCTMPL is owned by Bohra Bros Group which is one of the producers of The Accidental Prime Minister. According to the remand application filed by DGGSTI, the transactions were undertaken to “defraud” the British Film Institute to access the tax rebate.
Gutte has denied all the charges saying the government misunderstood the whole situation and thought he was part of a racket run by Horizon Outsource Solutions involving fraud of Rs 170 crore.
“In fact, I was a victim of the scam run by Horizon. I had paid Rs 34 crore to Horizon and, instead of paying the government, Horizon ran away with the money. I have filed a Rs 100 crore suit against Horizon Outsource. But I am glad the department arrested me because I believe that is how investigations in this country should be done,” he told The Indian Express.
VRG Digital Corporation is also accused of allegedly committing Rs 34-crore GST fraud by submitting fake invoices to claim input tax credit. Gutte is facing probe under the Central Goods and Services Tax Act for wrongfully availing input tax credit. He was earlier arrested and is currently out on bail.