LICENSING SERVICES OF FOR THE RIGHT TO BROADCAST & SHOW ORIGINAL FILMS., Goods and Services Tax - GST

[Sadanand Bulbule]

Dear Expert Sirs

Very good morning.

Here is a query relating to the interpretation of SAC Code relating to the " Licensing services for the right to broadcast & show original films". The details are as under:

1.Licensing services for the right to broadcast and show original films, sound recordings, radio and television program etc:

A dealer is is a film distributor & registered under GST Act for provision of Licensing for the right to broadcast service and shows original films which include sound recordings.This service includes licensing service for the right to reproduce, distribute or incorporate entertainment musical such as broadcasting and showing of original films, sound recordings, radio and television programs, pre-recorded tapes and videos. In his understanding, it is classifiable under the Service Account Code 997332 as per GST Act, 2017 and attracts 12% GST and accordingly it is admitted.

3. Whereas the inspecting authorities are interpreting the above mentioned services as falling under SAC CODE-999614: MOTION PICTURE, VIDEOTAPE AND TELEVISION PROGRAMME DISTRIBUTION SERVICES. GST RATE ON SAC CODE - 999614 is 18%.

3. In that event, in what way the services classified under SAC CODE. 997332 are different from the services classifiable under SAC CODE 999614 culminating in the higher rate of GST from 12% to 18% and whose understanding or interpretation is correct or should be correct?

4. Therefore the experts are requested to throw sufficient light on the impugned interpretation with relevant judicial rulings, if any.

With regards.

Posts / Replies

[Sadanand Bulbule]

Correction: Plx read the title as Licensing for instead of Licensing of.

[Sadanand Bulbule]

On the query, my limited understanding is as follows:

a.Sl No. 250 of the Notification No.11/2017- Central Tax (Rate) dated 28.06.2017 carries a classification under-Group 99733 with its heading "Licensing services for the right to use intellectual property and similar products". besides having sub-headings with licensing for specifically defined services.

b. When I look at SCHEDULE II and its Entry No. 5(c) it says- Temporary transfer or permitting the use or enjoyment of any intellectual property right is supply of service for the purpose of Section 7 of the GST Act.

c.Therefore SAC 997332- Licensing services for the right to broadcast and show original films, sound recordings, radio and television programme and the like, being copy right, in my limited opinion, attracts 12% GST.

d.The experts' clarification is very much eagerly awaited & solicited.

[Rajagopalan Ranganathan]

Sir,

Heading No. 999612 covers "Motion picture, videotape, television and radio programme production services. It does not cover "Licensing services for the right to broadcast and show original films, sound recordings, radio and television programme and the like and the same is classifiable under heading 997332 only. As per Sl. No. 17 of Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 as amended the rate of tax is 6% CGST and 6% SGST. Therefore you may contest Department's view by filing a proper reply to the notice, if any, issued by the Department.

[Sadanand Bulbule]

Sir,

Thank you so much for your response.