Mahesh Babu's Legal Team Gives Explanation about Income Tax Returns

After the Goods and Services Tax department attached two bank accounts of actor Mahesh Babu for allegedly not paying service tax, his legal team on Friday accused the GST Commissionerate of lapses and claimed that the due amount of Rs 18.5 lakh for which they levied a penalty of Rs 73.5 lakh was non-taxable.

According to the commissionerate, the accounts were seized to retrieve Rs 73.5 lakh including interest and penalty.

A statement from Mahesh Babu's team said the GST commissionerate attached the bank accounts for a disputed tax demand of Rs 18.5 lakh claiming Rs 73.5 lakh towards tax interest and the penalty for brand ambassador services rendered during 2007-08.

"The brand ambassador services were brought in the statute by insertion of section 65(105) with effect from 1-7-2010. The GST Commissionerate Hyderabad has carried out the attachment without notice when several judicial pronouncements on this issue is in favour of the taxpayer and more so when the dispute is pending before the High Court," it adds.

The department attached his Axis bank and ICICI bank account for an amount of Rs 73.5 lakh towards tax, interest and penalty. After attaching his bank accounts, the GST Commissionerate recovered Rs 42 lakh.

Officials through a press release had said that the 43-year-old actor cannot operate his bank accounts until the tax dues are settled.