Broadcasting service under service tax and Taxable event and Scope of Services
“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;
“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 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;
Date of Introduction of service: 16.7.2001 vide Notification No.4/2001-ST dt.09.07.2001.
Taxable events and scope of service:
Taxable service means any service provided to a client, by a broadcasting agency or organization in relation to broadcasting, in any manner. (Section 65(72) (zk) of Finance, Act 1994 as amended)
The service covers both radio broadcasting and television broadcasting. While radio broadcasting is done by the All India Radio or any private radio channel, television broadcasting is done by Doordarshan, Indian TV Channels and Foreign TV channels. The broadcasting may be of advertisements, news, serials/programmes or live events. The client is the person who wants an advertisement to be broadcast or the sponsor of a serial or programme or event who wants the serial or programme or event to be broadcast. The service provider, that is, broadcasting agency or organisation is the AIR, Doordarshan, other Indian TV Channels and foreign TV channels who broadcast the programme in India.
In case of foreign satellite TV channels, their head office may be located outside India. However, they have their branch offices or subsidiary companies located in India. In some cases, they have appointed agents. These branch offices/ subsidiary companies/agents act on behalf of these channels, selling time slots and recovering service charges and remitting the same to their head office/holding company/principals as the case may be. In such cases, these branch offices/subsidiary companies/ agents are rendering the service in relation to broadcasting and therefore, they are liable to pay the Service Tax and comply with all other procedural formalities relating to Service Tax.
In the case of AIR and Doordarshan, the billing for the service rendered is done by the Regional Stations of AIR or Regional Doordarshan Kendras. These Regional Offices will have to be, therefore, registered for payment of Service Tax and for complying with other procedural formalities.
Under section 22 of the Prashar Bharati Act 1990, Prasar Bharati (AIR & Doordarshan) are exempt only in respect of direct tax and not in respect of indirect tax. As such AIR or Doordarshan are liable to pay Service Tax.
Value of Taxable Service:
The value of taxable service shall be the gross amount charged by the service provider for such service rendered by him. (Section 67 of Finance Act, 1994 as amended)
Broadcasting service is provided by selling time slots. In the case of advertisements, service charges are recovered based on the duration and frequency of advertisement and the time slot (prime time, non-prime time etc.) provided for the advertisement. In the case of serials/programmes/ events, service charges are made on the basis of factors such as duration, time slot, etc. However, some free commercial time is provided to the sponsor, which he can sell the same to others. In the case of broadcasting service, the advertisement charges or the sponsorship charges received by the broadcasting agency or organization are the consideration for the services rendered and Service Tax is payable on these charges.