GV Prakash challenges service tax demand notice

Admitting the plea, Justice Anita Sumanth ordered notice to Directorate General of GST Intelligence, returnable by March 6. Prakash contended that composer of musical work becomes absolute owner of the copyright for it under the Copyright Act. Subsequent transfer of such rights are exempted from tax under mega exemption notifications dated June 20, 2012 issued by central government, he said. As per Sec 13(1)(a) of the Act, copyright subsists in musical work and composer is sole and absolute owner of such right and is exempted from service tax.

A person having the copyright of a cinematographic film would also not be required to pay service tax on amount received from exhibitors to screen the film in theatres, Prakash said. Claiming that April 9 2019 notice was sans jurisdiction, ex facie illegal and deserved to be quashed, the petitioner said that basically the authorities proposed to levy service tax on 4 types of transactions consideration received for assignment of copyright, performing roles in films, appearance in events and programmes and royalty. He also submitted he had paid applicable service tax on consideration received as a performing artist, but with regard to consideration for assignment of copyright, the same is exempted under Centre’s notification. Hence, he challenged the notice.