Music director challenges Rs 1.84 cr service tax demand notice

Chennai, Feb 28 (PTI) Music director G V Prakash on Friday moved the Madras High Court, challenging the Rs 1.84 crore service tax demand notice issued by the authorities in April last year for permanent transfer of copyright over his compositions to the producer.

Admitting the plea, Justice Anita Sumanth ordered notice to the Directorate General of GST Intelligence, returnable by March 6.

Prakash contended that the composer of musical work becomes the 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 the central government, he said.

As per Section 13(1)(a) of the Act, copyright subsists in musical work and the composer is the 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 the amount received from exhibitors to screen the film in theatres, Prakash said.

Claiming that the April 9 2019 notice was without jurisdiction, ex facie illegal and deserved to be quashed, the petitioner said that basically the authorities proposed to levy service tax on four 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 the central government notification.

On February 12, the court had stayed the operation of a notice issued by GST authorities to music composer A R Rahman, demanding service tax for permanent transfer of copyrights of his musical works to producers of such movies. PTI COR APR APR APR