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2023 (9) TMI 1048 - AAR - GSTClassification of services - Licensing services for the Right to Broadcast and Show Original Films, Sound Recordings, Radio and Television Programmes etc. - to be classified under SAC 997332 or not? - HELD THAT:- It is observed that SAC 9973 deals with the Leasing or Rental services without operator, SAC 99733 deals with Licensing services for the right to use intellectual property and similar products and SAC 997332 deals with Licensing sendees for the right to broadcast and show original films, sound recordings, radio and television programme etc. Further, it is specified that the service falling under SAC 997332 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. The service covered under SAC 997332 is for licensing the right to distribute and show original films by way of broadcasting the same. In the instant case, admittedly, licence is given by the distributor to the exhibitor for the purpose of exhibition in theatres, which means the exhibitor can only show the film by exhibiting the same in a theatre but cannot broadcast the same and show the film - The exhibitor in the instant case merely exhibits the film in a theatre but does not broadcast the said original film and show it. Thus the SAC 997332 is not appropriate and applicable to the instant case. In the instant case, the applicant obtains the distribution licence of the film from the producer and thus owns the copyright of the said film through the licence. The applicant in turn licences the exhibitor granting permission to exhibit the film, usually intended for theatres. It is pertinent to mention here that the film is included in the audiovisual works. Also the Note to the SAC 999614 stipulates that the transaction between the distributor and exhibitor is covered under the said SAC. The applicant in the instant case licences/grants permission to the exhibitor to exhibit the film and hence the impugned service is squarely covered under the SAC 9614 and is the most specific classification. It is found that Trade Parlance / Common Parlance test can be used only when the scheme of classification as per the Service Accounting Codes is ambiguous. In the instant case, the service of distribution of films is squarely covered under SAC 999614. The classification of licencing services of distribution of rights to exhibit the film by the distributor to the exhibitor are classified under SAC 999614.
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