Madras High court has issued a notice to composer AR Rahman based on an appeal filed by the Income Tax department. In the appeal, the IT department stated that AR Rahman had evaded tax in individual capacity by allegedly transferring his earnings of ₹3.47 crore to his charitable trust. The IT department has found inconsistencies in Rahman’s tax filing for the year 2011-12. The department had to move to the Madras High court mentioning that AR Rahman had forwarded remuneration of ₹3.47 crore to AR Rahman Foundation. The huge amount was his salary for composing ringtones for a UK-based telecom company called Libra mobiles. The incident is said to have happened in 2011, and the three-year contract was to compose exclusive ringtones for the company.
The legal practitioner of the Income Tax department said that the income for work has to be received in Rahman’s individual account which is taxable. After the deduction of income tax is made it can be moved to the charitable trust. A division bench of Justice TS Sivagnanam and Justice V Bhavani Subbaroyan had sent the notice to composer AR Rahman.
In February, the Madras HC had granted a temporary stay on the order passed by the Commissioner of Goods and Services Tax (GST) and Central Excise (CE) asking AR Rahman to pay a sum of ₹6.79 crore as arrear and an additional penalty of ₹6.79 crore.
The GST officials said that Rahman earned income by composing for movies and receiving royalties for his music work. According to the GST council, the services were taxable and claimed that the composer failed to pay service tax for the same.