Mahesh Babu, who is currently holidaying in Dubai with wife, Namrata Shirodkar and their children, was in for a rude shock when he woke up to read that his bank accounts were frozen, allegedly due to non-payment of GST dues.

"The GST Commissionerate Hyderabad has attached the bank accounts for a disputed tax demand of Rs. 18.50 lakh claiming Rs. 73.50 lakh towards Tax interest and a penalty for brand ambassador services rendered in FY 2007-08 which was not taxable service. 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 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. Mahesh Babu is a law-abiding citizen complying with all fiscal legislation and has no undisputed tax payable." stated an official statement which was issued on Mahesh Babu's behalf.

A source close to Mahesh stated that the actor is shocked and surprised by the sudden move to freeze his accounts. According to him, Mahesh Babu has always paid his taxes. There is full transparency in his finances. What was upsetting was the fact that his accounts were frozen with no prior intimation, warning or reminder.

When contacted, a senior official of the GST department said Mahesh Babu failed to get any reprieve from any appellate authority on this issue.

"We have attached the bank accounts and started recovering. We have recovered Rs 42 lakh from Axis Bank today. Balance, ICICI bank has to pay by tomorrow. Otherwise, action will be taken against ICICI Bank. Under section 74 of the Finance Act 1994, the bank is responsible for payment," sources told PTI.

However, Mahesh has paid up the so-called dues and will dispute the GST claim legally after he returns from his holiday and we are very sure that things will be sorted.