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2011 (9) TMI 180 - HC - Service TaxDirect-to-home (DTH) service - Levy of entertainment tax or service tax - Legislative powers of State Govt - Broadcasting service falling within the meaning of taxable service under section 65(105)(zk) of the Finance Act, 1994 - It contended on behalf of the petitioners that Parliament alone has the exclusive power to tax DTH services and that the States do not have any power to tax the said service by any name called. - Held that:- The petitioners have provided the infrastructure for downlinking signals of TV channels and of up-linking them to their Ku Band designated transponders and so on till the signals are viewable by a subscriber on his TV set or display monitor. By allowing the flow of content through their infrastructural setup they are providing a service. For doing so they are subjected to service tax under the service tax regime put in place by Parliament in exercise of its legislative power under article 246 of the Constitution read with Entry 92C of List I of the VIIth Schedule thereto. Under the said Act, the subject matter of the tax is the entertainment provided by the content that flows through the petitioners' system. The DTH service provider, in a sense only acts as a conduit between the content providers (i.e., TV Channels) and the content viewers (i.e., subscribers). It is the entertainment derived from the content that is the subject-matter of the tax under the said Act and not the service of enabling the flow of content through the DTH system. There is no scope of confusing one for the other. The conclusion is clear that the State Legislature had (and has) the legislative competence to levy an entertainment tax on all payments for admission to an entertainment through a direct-to-home (DTH) as contemplated in section 7 and other provisions of the said Act. - Decided against the assessee.
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