Copyright - Service Tax Practice Manual / Ready Reckoner - Service Tax

Chapter 15 Copyright (w.e.f. 1st July, 2012) Scope of Exempt Service Notification no. 25/2012 dated 20.06.2012 From 1.7.2012 to 31.3.2013 15. Services provided by way of temporary transfer or permitting the use or enjoyment of a copyright covered under clauses (a) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical, artistic works. From 1.4.2013 - Notification no. 3/2013 ST dated 1.3.2013 15. Services provided by way of temporary transfer or permitting the use or enjoyment of a copyright,- (a) covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical or artistic works; or (b) of cinematograph films for exhibition in a cinema hall or cinema theatre; Amendment Notes w.e.f 1.4.2013 - The benefit of exemption under S. No 15 of the notification in relation to copyrights for cinematograph films will now be available only to films exhibited in a cinema hall or theatre. This will allow service providers to pass on input tax credits to taxable end-users; (See Notification no. 25/2012 dated 20.06.2012 , effective from 01.07.2012) Clarification by the Board ( Taxation Guide Guidance Note 7 Exemptions dated 20.06.2012) 7.10.1 Will a music company having the copyright for any sound recording be taxable for his activity of distributing music? . A music company would be required to pay service tax as the copyright relating to sound recording falls under clause (c) of sub-section (1) of section 13 of the Indian Copyright Act, 1957. 7.10.2 I am a composer of a song having the copyright for my song. When I allow the recording of the song on payment of some royalty by a music company for further distribution, am I required to pay service tax on the royalty amount received from a music company? No, as the copyright relating to original work of composing song falls under clause (a) of subsection (1) of section 13 of the Indian Copyright Act, 1957 which is exempt from service tax. Similarly an author having copy right of a book written by him would not be required to pay service tax on royalty amount received from the publisher for publishing the book. A person having the copyright of a cinematographic film would also not be required to pay service tax on the amount received from the film exhibitors for exhibiting the cinematographic film in cinema theatres. 7.10.3 What would be the liability of service tax on various arrangements entered into for screening of cinematographic films by producers/distributors/exhibitors? A detailed circular has been issued by the Board dealing with various arrangements in the context of existing present system of taxation based on positive list of services vide Circular No. 148/17/2011 -ST , dated 13.12.2011 issued from. The said circular may be referred for the guidance. However, no service tax is payable on temporary transfer of copyright in relation to cinematographic films as the same is exempt under the mega-notification 25/2012 .