9911796707
TMI Blog2024 (4) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. The lower Authority have discussed the issue in detail, along with provisions of SAC 997332 and 999614 and have countered the arguments put forth by the Appellant and have given a ruling that the Classification of the Licensing Services of distribution of rights to exhibit the films by the distributor to the exhibitor are classifiable under SAC 999614 . Under the circumstances, it is found that the ruling given by the Lower Authority is just and proper and it is not considered necessary to interfere with the same. Accordingly, the Advance Ruling is upheld. - SHRI. ROOPAM KAPOOR, AND SMT. SHIKHA C, MEMBER Represented by : Shri. V.R. Balasubramani, Advocate and Consultant PROCEEDINGS (Under Section 101 of the CGST Act, 2017 and the KGST Act, 2017) 1. At the outset we would like to make it clear that the provisions of CGST, Act 2017 and SGST, Act 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 2. The present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssification of Licensing Services for The Right to Broadcast and Show Original Films, Sound Recordings, Radio and Television Programmes Etc. And whereas the ruling of the Authority for Advance Ruling vide the Order dated 15-09-2023 relates to the classification of the Licensing services of distribution of rights to exhibit the films by the distributor to the exhibition are held classifiable under SAC 999613. b) That the Authority for Advance Ruling has not been able to appreciate the two stages where classification is necessary, one being the licensing stage and the other being the Leasing stage. To elaborate on this point, Licensing services are those where the owner of the rights in specified works, assigns' another person called the distributor, which is precisely the classification sought by the Applicant in the prayer at the first stage. Thereupon, the distributor merely leasing only the rights to exhibit and therefore these rights are not transferred, but only given or agreed to the exhibitors to exhibit the films or programmes, which is the second stage. c) That the Appellant had in the ARA-01 had prayed for Determination of Correct Classification of Licensing Services f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) That, it is unable to digest as to how such a blatant, transparent and erroneous conclusion could be reached by the Authority for Advance Ruling when the paragraphs mentioned in the impugned order in the said ruling is contradictory and oppose each other. f) On this score also, the impugned ruling is liable to be set aside. Ill IGNORING AND BRUSHING ASIDE THE EXCLUSION CLAUSE AT ESGIE DESPITE VEHEMENT, STRONG EMPHASIS AND IMPORTANCE BY THE APPELLANT a) Even though the Hon'ble Authority appeared to be satisfied with prolonged argument in this regard at the time of Personal hearing, yet totally deviated from the prayer for giving ruling on Licensing services (by the copyright holder) for the right to reproduce, distribute or incorporate audiovisual originals, but given a total different and diverse ruling that the classification of licensing services of distributors of rights to exhibit the film by the distributor to the exhibitor are classified under SAC 999614. b) It is relevant to mention that the Appellant is himself an Exhibitor of films and there is no licensing agreement between the distributor and the Appellant, but only a lease agreement, for a specific period, on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling authority very cautiously and vigilantly brushed aside the exclusion clause of SAC 999614 which reads as: This service code does not include:-licensing services (by the copyright holder) for the right to reproduce, distribute or incorporate audiovisual originals, of 99732 b) The other observations of the Hon'ble Ruling Authority is more or less repetition of the earlier stand and again and again it is reiterate that the distributor gives license to the Exhibitor for screening the films which is not so in reality as the distributor only leases or rents his right to the Exhibitor to exhibit movies c) That, it is prevalent in trade parlance, the key difference between the two arrangements which lies in the manner in which the Exhibitor is allowed to use the leased rights. The ownership of the said property rights continues to lie with the Distributor. Whereas, under a lease, the Exhibitor is granted the right to exhibit films only for a specific period by the distributor. Therefore, license and lease are two different, distinct and are poles apart, which difference, is perhaps missed by the Hon'ble Ruling Authority advertently. On these grounds and contentions mentioned s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VI. CLASSIFICATION OF THE FILM DISTRIBUTION SERVICE TO THEATRES FOR EXHIBITION ALL OVER INDIA AS IS PREVALENT FROM THE DATE OF COMMENCEMENT OF GST REGIME IN JULY 2017. a) That the Hon'ble Ruling Authority has held that the classification of film distribution throughout India is under SAC 9973 attracting a GST rate of 12% (earlier) and at 18% from 01-10-2021 and that this classification is followed and approved by all the GST authorities throughout India b) In order to support this contention, the Appellant has collected some Invoices from Distributors all over the country and had tabulated and mentioned in the Table and copies of the same were enclosed to this Appeal. c) That now also the table would makes it clear that it is an accepted classification throughout the Country followed and acknowledged and which is strictly classified according to the scheme of classification of services. The table exhibits that the classification of film distribution in various parts of the country is under 997332 only, and not under any under any other service code and therefore to venture into classification would amount to going beyond the scope of Code of classification of services, as spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s For The Right to Broadcast And Show Original Films, Sound Recordings, Radio and Television Programmes Etc under SAC 997332 . 10. As per Explanatory Notes to the Scheme of Classification of Services under GST, the description given under SAC 997332 is as below: 997332 : Licensing services for the right to broadcast and show original films, sound recordings, radio and television programme etc. This service code includes: - licensing services for the right to reproduce, distribute or incorporate entertainment, musical such as broadcasting and showing of original films, sound recordings, radio and television programmes, prerecorded tapes and videos. A careful reading of the question on which advance ruling was sought by the appellant, it emerges that they have used the exact same wordings of scheme of classification under SAC 997332 and have sought for confirmation of the same, instead of seeking correct classification of their proposed activity. In the application for advance ruling as well as in the Grounds of Appeal they have stated that they have intention to diversify the business, by entering into Licensing services for the right to broadcast and show original films, sound reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement uses the words licensing rights service agreement/ assignment of rights service agreement, it is categorically held in the agreement that the licensor holds only the distribution rights. We also observe that despite being pointed out during the course of hearing, appellant has not brought out if he was copy right holder for the product being distributed by him. We would like to observe that the fact whether the appellant is copy right holder would be crucial in determining classification of the activity undertaken by him. 11.4: In view of the above, it appears that they had sought advance ruling on the services relating to Distribution of films to Theatres. But contrary to this, they have claimed at para IV (e) of Grounds of Appeal that the Appellant had never sought classification of the transaction between the Distributor and the Exhibitor. Therefore, we are of the opinion that the Appellant has contradicted and confused the issue. Under the circumstances, analysis of clauses of the actual contract or agreement entered into by the Appellant with the service recipients assumes utmost importance. The Appellant have not furnished any contract or agreement entered into by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
