Copyright services under Mega exemption notification :

Services provided by way of temporary transfer or permitting the use or enjoyment of a copyright,-

(a) covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957, relating to original literary, dramatic, musical or artistic works; or

(b) of cinematograph films for exhibition in a cinema hall or cinema theatre are exempt from service tax.

Illustrations

1. Sur Music Company (SMC) recorded a song for which they have the copyright. Whether SMC would be taxable for its activity of distributing music?

The music company would be required to pay service tax as the copyright relating to sound recording falls under clause (c) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 i.e. sound recording.

2. Ram Prasad is a composer of a song having the copyright for his song. He allowed the recording of the song on payment of some royalty by Kaveri Music Company for further distribution, is he required to pay service tax on the royalty amount received from Kaveri Music Company?

No, as the copyright relating to original work of composing song falls under clause (a) of subsection (1) of section 13 of the Indian Copyright Act, 1957 which is exempt from service tax.

An author having copy right of a book written by him would not be required to pay service tax on royalty amount received from the publisher for publishing the book. A person having the copyright of a cinematographic film would also not be required to pay service tax on the amount received from the film exhibitors for exhibiting the cinematographic film in cinema theatres.

The provisions relating to copyrights are governed by the Indian Copyright Act, 1957. Section 13(1) of the Indian Copyrights Act, 1957 provides that the copyright subsists in the following classes of works:- (a) Original literary, dramatic, musical and artistic works; (b) Recording of cinematographic films; (c) Sound recordings.