Top celebrities like Abhishek Bachchan, Rani Mukherjee, Aishwarya Rai and Kareena Kapoor have registered with the Service Tax Department in their capacities as brand ambassadors.
Aamir Khan, Sunny Deol, Bobby Deol and Naseeruddin Shah are also expected to register.
"Counting out Aamir Khan, Sunny Deol and some television artistes, almost all celebrity brand endorsers (film stars and sportspersons) have approached us this time. But there are many other endorsers out there feigning ignorance," said top officials at the Service Tax Department requesting anonymity.
The Finance Act, 2006, makes it mandatory for persons promoting the sale of products or brands to pay 12.24 per cent service tax on their net endorsement earnings. The levy is paid quarterly through the taxpayer's bank account and returns are filed once every six months. Tax for the first quarter (after enactment) will be collected till July 5.
The earnestness on the part of the celebrities is attributed to the clear-cut notification.
"When we tried to levy service tax on brand endorsers last year, many opposed us. They contended that only `commercial concerns' (event/sports management companies) were required to pay service tax for promotion of brands and products," said Mr Rajender Singh, Joint Commissioner, Department of Service Tax.
Top Bollywood stars like Kareena Kapoor, Aishwarya Rai, Rani Mukherjee, Naseeruddin Shah and Manisha Koirala had then fought tooth and nail against the levy.
The Finance Act, 2006, however, removed the confusion by substituting the term `commercial concern' with `person' and made the levy compulsory.