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Demand of Service Tax on CBFC - reg. - Service Tax - F.No.V/DGST/30-Misc.185/2008/409Extract F.No.V/DGST/30-Misc.185/2008/409 DIRECTORATE GENERAL OF SERVICE TAX 1st Floor, Piramal Chambers, Jijibhoy Lane , Parel, Lalbaug, Mumbai - 400 012. Dated : January 16, 2009 Subject : Demand of Service Tax on CBFC - reg. An instance has come to the notice of the Board in respect of a field formation whereby a Show Cause Notice has been issued demanding Service Tax from Central Board of Film Certification under the category of 'Technical Testing and Analysis Service' and/or 'Technical Inspection and Certification Service' on account of services provided by Central Board of Film Certification by way of certification of films. 2. This issue was brought to the notice of the Board by the Secretary, Ministry of Information and Broadcasting. The matter has been examined by the Board. The Board has now clarified the matter as follows :- "This certification by Central Board of Film is done to ensure that film is suitable for exhibition and not against interest of sovereignty and integrity of India, the security of the State, friendly relation with foreign States, public order, decency or morality or involves defamation or contempt of court etc. It is a mandatory requirement under the provisions of Cinematographic Act, 1952. The Act provides that any person, who exhibits a film other than a film which has been certified by the Board as suitable for unrestricted public exhibition or for public exhibition restricted to adults, he shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to one lakh rupees, or with both, and in the case of a continuing offence with a further fine which may extend to twenty thousand rupees for each day during which the offence continues. Hence certification by Central Board of Film Certification is a statutory requirement. CBEC vide Circular No.96/7/2007-ST dated 23.08.2007 has clarified that any activity assigned to and performed by a sovereign/public authority under the provisions of any law, do not constitute taxable services. Any amount/fee collected in such cases are not to be treated as consideration for the purpose of levy of service tax. In the instant case, CBFC issues certificates as required under the provisions of law i.e. Cinematographic Act, 1952, and thus does not constitute taxable service". 3. The aforesaid clarification given by the Board may please be brought to be notice of the filed formations. Pending issues, if any, may be decided accordingly. PRANESH PATHAK ADDITIONAL DIRECTOR
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