13. BROADCASTING
(RADIO AND TELEVISION) SERVICES
(A) Date of Introduction: 16.07.2001 (Notification No.
4/2001-S.T. dated 09.07.2001)
(B)
Definition and scope of service:
“Taxable Service” means any service provided or to be provided
to a client, by a broadcasting agency or organization in relation to
broadcasting, in any manner and, in the case of broadcasting agency or organisation, having its head office situated in any place
outside India, includes service provided by its branch office or subsidiary or
representative in India or any agent appointed in India or by any person who
acts on its behalf in any manner, engaged in the activity of selling of time
slots for broadcasting of any programme or obtaining
sponsorships for programmes or collecting the
broadcasting charges or permitting the rights to receive any form of
communication like sign, signal, writing, picture, image and sounds of all
kinds by transmission of electro-magnetic waves through space or through
cables, direct to home signals or by any other means to cable operator,
including multisystem operator or any other person on behalf of the said agency
or organisation.
Explanation: For the removal of doubts, it is hereby
declared that so long as the radio or television programme
broadcast is received in India and intended for listening or viewing, as the
case may be, by the public, such service shall be taxable service in relation
to broadcasting, even if the encryption of the signals or beaming thereof
through the satellite might have taken place outside India;
[Section 65 (105) (zk) of Finance Act, 1994 as amended]
"Broadcasting" has the meaning
assigned to it in clause (c ) of section 2 of the Prasar
Bharati (Broadcasting Corporation of India) Act, 1990
(25 of 1990) and also includes programme selection,
scheduling or presentation of sound or visual matter on a radio or a television
channel that is intended for public listening or viewing, as the case may be;
and in the case of a broadcasting agency or organisation,
having its head office situated in any place outside India, includes the
activity of selling of time slots or obtaining sponsorships for broadcasting of
any programme or collecting the broadcasting charges
or permitting the rights to receive any form of communication like sign,
signal, writing, picture, image and sounds of all kinds by transmission of
electro-magnetic waves through space or through cables, direct to home signals
or by any other means to cable operator including multisystem operator or any
other person on behalf of the said agency or organisation,
by its branch office or subsidiary or representative in India or any agent
appointed in India or by any person who acts on its behalf in any manner;
[Section 65(15) of Finance Act, 1994
as amended]
"Broadcasting
Agency or Organization" means any agency or organization engaged in
providing service in relating to broadcasting in any manner and, in the case of
a broadcasting agency or organization, having its head office situated in any place
outside India, includes its branch office or subsidiary or representative in
India or any agent appointed in India or any person who acts on its behalf in
any manner, engaged in the activity of selling of time slots for broadcasting
of any programme or obtaining sponsorships for programme or collecting the broadcasting charges or
permitting the rights to receive any form of communication like sign, signal,
writing, picture, image and sounds of all kinds by transmission of
electro-magnetic waves through space or through cables, direct to home signals
or by any other means to cable operator including multisystem operator or any
other person on behalf of the said agency or organisation;
[Section 65 (16) of Finance Act, 1994
as amended]
“Programme” means any audio or
visual matter, live or recorded, which is intended to be disseminated by
transmission of electro-magnetic waves through space or through cables intended
to be received by the general public either directly or indirectly through the
medium of relay stations;
[Section 65 (86a) of Finance Act, 1994 as
amended]
(C) Rate of Tax & Accounting Code:
|
|
Rate of Tax |
Accounting Code |
|
Service Tax |
10% of the value of services |
00440165 |
|
Education Cess |
2% of the service tax payable |
00440298 |
|
Secondary and Higher Education cess |
1% of the service tax payable. |
00440426 |
|
Other –Penalty/interest |
As levied or applicable |
00440166 |
( Rate
of tax is effective from 24.02.2009.)
( D ) Classification of Taxable Services:
(1)
The classification of taxable services shall be determined according to the
terms of the sub-clauses (105) of section 65;
(2) When
for any reason , a taxable service is prima facie, classifiable under two or
more sub-clauses of clause (105) of section 65, classification shall be
effected as follows :-
(a) the sub-clause
which provides the most specific description shall be preferred to sub-clauses
providing a more general description;
(b) composite services consisting of a
combination of different services which cannot be classified in the manner
specified in clause (a), shall be classified as if they consisted of a service
which gives them their essential character, in so far as this criterion is
applicable;
(c) when a service
cannot be classified in the manner specified in clause (a) or clause (b), it
shall be classified under the sub-clause which occurs first among the
sub-clauses which equally merits consideration.
( Sec.65A of
Finance Act,1994)
(E)
Valuation of taxable services for charging Service tax
(1) Service tax chargeable on any taxable service
with reference to its value shall,—
(i)
in a case where the provision of service is for a consideration in money, be
the gross amount charged by the service provider for such service provided or
to be provided by him;
(ii) in a case where
the provision of service is for a consideration not wholly or partly consisting
of money, be such amount in money, with the addition of service tax charged, is
equivalent to the consideration;
(iii) in a case where the provision of service is for a
consideration which is not ascertainable, be the amount as may be determined in
the prescribed manner.
(2) Where the gross
amount charged by a service provider, for the service provided or to be
provided is inclusive of service tax payable, the value of such taxable service
shall be such amount as, with the addition of tax payable, is equal to the gross
amount charged.
(3) The gross amount
charged for the taxable service shall include any amount received towards the
taxable service before, during or after provision of such service.
(4) Subject to the
provisions of sub-sections (1), (2) and (3), the value shall be determined in
such manner as may be prescribed.
Explanation.—For the purposes of this section,—
(a) “consideration” includes any amount that is payable for the
taxable services provided or to be provided;
(b) “money” includes
any currency, cheque, promissory note, letter of
credit, draft, pay order, travellers cheque, money order, postal remittance and other similar
instruments but does not include currency that is held for its numismatic
value;
(c) “gross amount
charged” includes payment by cheque, credit card,
deduction from account and any form of payment by issue of credit notes or
debit notes and ‘book adjustment, and any amount credited or debited, as the
case may be, to any account, whether called “Suspense account” or by any other
name, in the books of account of a person liable to pay service tax, where the
transaction of taxable service is with any associated enterprise.
( Sec.67 of
Finance Act,1994)
Inclusion
in or Exclusion from value of certain expenditure or cost:
(1) Where any expenditure or costs are incurred
by the service provider in the course of providing taxable service, all such
expenditure or costs shall be treated as consideration for the taxable service
provided or to be provided and shall be included in the value for the purpose
of charging service tax on the said service.
[Rule 5(1) of Service
Tax (Determination of Value) Rules,2006)]
(2)
The expenditure or costs incurred by the service provider as a pure
agent of the recipient of service, shall be excluded from the
value of the taxable service if all the following conditions are
satisfied, namely:-
(i) the service provider acts as a pure agent of the recipient
of service when he makes payment to third party for the goods or services
procured;
(ii) the recipient of service receives and uses the goods or
services so procured by the service provider in his capacity as pure
agent of the recipient of service;
(iii) the recipient of service is liable to make payment to the
third party;
(iv) the recipient of service authorizes the service provider to
make payment on his behalf;
(v) the recipient of service knows that the goods and services
for which payment has been made by the service provider shall be provided
by the third party;
(vi) the payment made by the service provider on behalf of the
recipient of service has been separately indicated in the invoice issued by the
service provider to the recipient of service;
(vii) the
service provider recovers from the recipient of service only such amount as has
been paid by him to the third party; and
(viii)
the goods or services procured by the service
provider from the third party as a pure agent of the recipient of service are
in addition to the services he provides on his own account.
[Rule 5(2) of Service Tax
(Determination of Value) Rules,2006)]
(F) Clarifications issued by the Board:
(i) The Board vide Circular No.96/7/2007-ST dated
23.08.2007 on theses services has clarified the following
issues-
|
032.01 / 23.08.07 |
Whether
Prasar Bharati
Corporation (Doordarshan and All India Radio) are
liable to pay service tax under Broadcasting Service [section 65(105) (zk)]? |
Prior
to 1.3.2003, Prasar Bharati
Corporation did not pay service tax by virtue of erstwhile section 22 of the PrasarBharati (Broadcasting Corporation of India) Act,
1990. However, the said section 22 was omitted vide section 163 of the
Finance Act, 2002 with effect from 1.4.2003.
In
view of the above statutory changes, with effect from 1.4.2003 Prasar Bharati Corporation is
liable to pay service tax for the broadcasting services provided like any
other broadcasting agency or organization engaged in providing service in
relation to broadcasting. |
(G)
Exemption & Exclusion:
1.
Exemption to Small Scale Service Providers:
In exercise of the
powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of
1994) (hereinafter referred to as the said Finance Act), the Central
Government, on being satisfied that it is necessary in the public interest so
to do, hereby exempts taxable services of aggregate value not exceeding Ten lakh*
rupees in any financial year from the whole of the service tax leviable thereon under section 66 of the said Finance Act:
Provided
that nothing contained in this notification shall apply to,-
(i)
taxable services provided by a person under a
brand name or trade name, whether registered or not, of another person; or
(ii) such
value of taxable services in respect of which service tax shall be paid by such
person and in such manner as specified under sub-section (2) of section 68 of
the said Finance Act read with Service Tax Rules,1994.
2.
The exemption contained in this notification shall apply subject to the
following conditions, namely:-
(i) the provider
of taxable service has the option not to avail the exemption contained in this
notification and pay service tax on the taxable services provided by him and
such option, once exercised in a financial year, shall not be withdrawn during
the remaining part of such financial year;
(ii)
the provider of taxable service shall
not avail the CENVAT credit of service tax paid on any input services, under
rule 3 or rule 13 of the CENVAT Credit Rules, 2004 (herein after referred to as
the said rules), used for providing the said taxable service, for which
exemption from payment of service tax under this notification is availed of;
(iii)
the provider of taxable service shall
not avail the CENVAT credit under rule 3 of the said rules, on capital goods
received in the premises of provider of such taxable service during the period
in which the service provider avails exemption from payment of service tax
under this notification;
(iv)
the provider of taxable service shall
avail the CENVAT credit only on such inputs or input services received, on or
after the date on which the service provider starts paying service tax, and
used for the provision of taxable services for which service tax is payable;
(v)
the provider of taxable service who
starts availing exemption under this notification shall be required to pay an
amount equivalent to the CENVAT credit taken by him, if any, in respect of such
inputs lying in stock or in process on the date on which the provider of
taxable service starts availing exemption under this notification;
(vi)
the balance of CENVAT credit lying unutilised in the account of the taxable service provider
after deducting the amount referred to in sub-paragraph (v), if any, shall not
be utilised in terms of provision under sub-rule (4)
of rule 3 of the said rules and shall lapse on the day such service provider
starts availing the exemption under this notification;
(vii)
where a taxable service provider
provides one or more taxable services from one or more premises, the exemption
under this notification shall apply to the aggregate value of all such taxable
services and from all such premises and not separately for each
premises or each services; and
(viii)
the aggregate value of taxable services rendered by a
provider of taxable service from one or more premises, does not exceed rupees *ten lakhs in
the preceding financial year.
3.
For the purposes of determining aggregate value not exceeding ten*lakh
rupees, to avail exemption under this notification, in relation to taxable
service provided by a goods transport agency, the payment received towards the
gross amount charged by such goods transport agency under section 67 for which
the person liable for paying service tax is as specified under subsection (2)
of section 68 of the said Finance Act read with Service Tax Rules, 1994, shall
not be taken into account.
Explanation.- For the purposes of this notification,-
(A)
“brand name” or “trade name” means a brand name or a trade name, whether
registered or not, that is to say, a name or a mark, such as symbol, monogram,
logo, label, signature, or invented word or writing which is used in relation
to such specified services for the purpose of indicating, or so as to indicate
a connection in the course of trade between such specified services and some
person using such name or mark with or without any indication of the identity of
that person;
(B)
“aggregate value not exceeding *ten lakh rupees means the sum total of first consecutive
payments received during a financial year towards the gross amount, as
prescribed under section 67 of the said Finance Act, charged by the service provider
towards taxable services till the aggregate amount of such payments is equal to
ten lakh rupees but does not include payments
received towards such gross amount which are exempt from whole of service tax leviable thereon under section 66 of the said Finance Act
under any other notification.
4.
This notification shall come into force on the 1st day of April, 2005.
[Notification
No. 6/2005-ST, dated 1-3-2005. *Amended by Notfn.No.
8/2008-ST dated 01.03.2008]
2. Services
to UN Agencies
Services provided to United Nations or an International Organizations are exempt.
[Notification No. 16/2002-ST, dated 2-8-2002]
3. Export of service: Any service which
is taxable under clause 105 of Section 65 may be exported without payment of
service tax.
( Rule 4 of Export of
Services Rules,2005)
4. Exemption to services provided to a
developer of SEZ or a unit of SEZ:
Exempts the taxable services specified in clause (105) of
section 65 of the said Finance Act, which are provided in relation to the
authorized operations in a Special Economic Zone, and received by a developer
or units of a Special Economic Zone, whether or not the
said taxable services are provided inside the Special Economic Zone, from the whole of the service tax leviable thereon under section 66 of the said Finance Act
subject to certain conditions. ( Refer notification
for details)
{ Notification No. 09/2009ST dated
03.03.2009 (Prior to 03.03.2009 Notfn.No4/2004-ST dated 31.03.2004)}
5. Exemption to value of goods & material
sold by service provider: In exercise of the
powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the
Central Government, being satisfied that it is necessary in the public interest
so to do, hereby exempts so much of the value of all the taxable services, as
is equal to the value of goods and materials sold by the service provider to
the recipient of service, from the service tax leviable
thereon under section (66) of the said Act, subject to condition that there is
documentary proof specifically indicating the value of the said goods and
materials.
(Notification No. 12/2003-ST dated 20.06.2003
effective from 01.07.2003)
6. Exemption to taxable services provided by TBI
and STEP: All taxable services,
provided by a Technology Business Incubator (TBI) or a Science and Technology
Entrepreneurship Park (STEP) recognized by the
National Science and technology
Entrepreneurship Development Board (NSTEDB) of the Department of Science
and Technology, Govt. of India from the
whole of the service tax leviable thereon subject tio
certain conditions and procedures. ( Refer
notification for details)
(Notification No.09/2007 ST dated 01.03.2007)
7. Exemption to taxable services provided by
entrepreneurs located within the premises of TBI or STEP: All taxable services, provided by an
entrepreneur located within the premises
of a Technology Business Incubator (TBI)
or a Science and Technology Entrepreneurship Park (STEP) recognized by the National Science and technology Entrepreneurship Development Board (NSTEDB)
of the Department of Science and Technology, Govt. of India from the whole of the service tax leviable thereon
subject to certain conditions and
procedures. ( Refer notification for details)
(Notification No.10/2007 ST dated 01.03.2007)
8. Exemption to services provided to Foreign
Diplomatic Missions or Consular Post in India:
All
services provided by any person, for the official use of a Foreign Diplomatic
Mission or Consular Post in India are exempted from service tax subject to certain
conditions and procedures. (Refer notification for details)
(Notification No. 33/2007-ST dated 23.05.2007)
9. Exemption to services provided for personal
use of a family member of Diplomatic Agent or Career Consular Officers posted
in Foreign Diplomatic Mission/Consular Post in India: All services provided by any person, for
personal use of family member of Diplomatic Agents or Career Consular officers
posted in a
Foreign Diplomatic Mission or Consular
Post in India are exempted from service tax subject to certain conditions and
procedures. (Refer notification for details)
(Notification No. 34/2007-ST dated 23.05.2007)
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