TMI BlogRegarding clarification on levy of service tax on distributors/sub-distributors of films & exhibitors of movieX X X X Extracts X X X X X X X X Extracts X X X X ..... Madam/Sir, Subject : - Clarification on levy of service tax on distributors/sub-distributors of films exhibitors of movie - regarding. 1. Representations requesting clarification on taxability of consideration earned by the distributors/sub-distributors/area distributors of Indian Foreign films in the form of revenue share from the exhibitors of the movie, and on revenue retained as percentage by the exhibitors of the movie from the sale of tickets have been received from certain sections of service providers in the light of recent changes in the law and CBEC Circular No 109/03/2009 dated 23.02.2009 issued under F. No. 137/186/2007-CX.4. 2. These representations have been examined. Subsequent to issuance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the government exchequer. 5. In cases where no such copyrights are transferred by the distributor or sub-distributor or area distributor to the exhibitor or theatre owner, the same is not chargeable to service tax under Copyright Services. However the business transaction needs to be examined for leviability of service tax under other heads. Depending upon the arrangement whether the theatre owner has merely let out its premises to the distributor or is also involved in giving support services for the business of the distributer, there can be a case of leviability of service tax on the remuneration retained by such theatre owner under Business Support service or Renting of Immovable Property . The definition of Business Support s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hon ble Supreme Court of India in the case of New Horizons [1995 SCC (1) 478; 1994 -TMI 83686] wherein it was held that the expression joint venture connotes a legal entity in the nature of a partnership engaged in the joint undertaking of a particular transaction for mutual profit or an association of persons or companies jointly undertaking some commercial enterprise wherein all contribute assets and share risks. It requires a community of interest in the performance of the subject-matter, a right to direct and govern the policy in connection therewith, and duty, which may be altered by agreement, to share both in profit and losses. The independence of joint venture as a separate legal entity, away from its constituent members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Movie exhibited on whose account Service Tax Implication Principal to Principal Basis Movie being exhibited by theatre owner or exhibitor on his account i.e. The copyrights are temporarily transferred Service tax under copyright service to be provided by distributor or sub-distributor or area distributor or producer etc, as the case may be Movie being exhibited on behalf of Distributor or Sub-Distributor or Area Distributor or Producer etc i.e. no copyrights are temporarily transferred Service Tax under Business Support Service / Renting of Immovable Property Service, as the case may be, to be provided by Theatre Owner or Exhibitor Arrangement under unincorpor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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