Click to play videoNew Delhi: She was the designer behind the costumes for the surprise hit of 2006, Khosla ka Ghosla. Today 31-year-old Manushi Nath is busy selecting fabric for her next film project.
This costume designer has been working on contractual basis for films for over eight years now. But for the first time in her life, she's worried about the upcoming budget.
The reason being that as a designer, she has a degree of techincal expertise. The Government feels that she is offering a service and she also happens to belong to the film and television industry, hence the need to pay service tax.
"Ours is a very disorganised work culture. Some of the projects get extended for more than one financial year," says Manushi.
The film industry is a business of hits and misses. A group of studio operators, make up artists, costume designers, music directors, art directors and actors team up for a project which may not even be released.
With all these professionals attached to film and television productions likely to come under the ambit of service tax this year, producers like Savita Raj of Khosla Ka Ghosla fame have now left their sets and grabbed a pen and paper.
"Probably the whole working culture will change if that happens. Then people will not be hired on contractual basis and we will have to hire them to bring them under the salary slot. We hire professionals who get in and out of the projects, which will be very difficult as there are very few people who are trained and good. It's like a war between production houses to hire the best," says Savita.
As of now, 97 services are taxable under the Service Tax Act, but this year the Finance Minister is likely to bring 40 more under the net. What's more, the rate of tax is also set to increase from 12 per cent to 14 per cent.
Says KPMG Executive Director, S Harishanker, "Last year, the Finance Minister made a statement to the extent that India would move towards unified goods and service tax at a federal level by 2010. This means that more and more services and goods will have to be unified into a single rate at the federal and state level."
Tax analysts say that this would have a trickle down effect and then the consumer could end up paying more for the three hour treat.
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