Broadcasters have to pay both service, luxury taxes: Supreme Court
The Supreme Court on Thursday held that broadcasters are liable to pay both service tax and entertainment tax on the broadcasting activity for the purpose of entertainment of the subscriber as both Parliament and the state legislatures have the legislative competence to levy the taxes.The two taxes are different aspects of the same activity which enable two different legislatures to impose tax under distinct taxation entries in two different Lists, the apex court said.A bench of Justices B.V. Nagarathna and N.K. Singh said that in the instant case, the Parliament under the Finance Act, 1994 and its amendments is not imposing a tax on entertainment. Such a tax is being imposed by the state legislatures as entertainment is a luxury within the meaning of Entry 62 - List II, it said.
'In the same way, the Finance Act along with its amendments seeks to impose a tax on the service rendered by the broadcasting agency which is imposed under Entry 97 List – I. In the same vein, under Entry 62 List – II, the state governments are not imposing any service tax on the assesses,' the top court said.
It further stated that there is no overlapping in fact or in law, inasmuch as different aspects of the same activity are being taxed under two different legislations by two different legislatures.
'This is because the activity of broadcasting is a service and liable to service tax imposed by the Parliament (Entry 97 – List I of the Seventh Schedule of the Constitution) and the activity of entertainment is a subject falling under Entry 62 - List II and therefore, the assessees herein are liable to pay entertainment tax as well. Hence, the State Legislatures as well as the Parliament, both have the legislative competence to levy entertainment tax as well as service tax respectively on the activity carried out by the assessees herein,' the judgment stated.
According to it, no entertainment can be presented to the viewers unless the broadcaster transmits the signals for instantaneous presentation of any performance, film or any programme on their television.
'Thus, there are two aspects in this activity; the first is the act of transmission of signals of the content to the subscribers. The second aspect here concerns not only the content of the signals, but the effect of the decryption of the signals by the Set-Top Boxes and the viewing cards inside these boxes provided by the assessees to the subscribers, which is providing and receiving of entertainment through the television. Without the apparatus provided for by the assessees to decrypt the signals, the subscriber would not be able to watch the content that is transmitted, the content being for the purpose of entertainment,' Justice Nagarathna, writing for the bench, said in her 321-page judgment.
The television entertainment provided by them through broadcasting, is a luxury within the meaning of Entry 62 - List II. The assessees who are engaged in the activity of providing entertainment are liable to pay service tax on the activity of broadcasting under the provisions of the Finance Act, 1994 read with relevant amendments and are also liable to pay entertainment tax in terms of Entry 62 - List II as being a specie of luxuries, the court added.
The apex court was hearing a batch of cases from different high courts (lead case being Kerala vs Asianet Satellite Communications) in which entertainment tax was charged from broadcasters by various states. The broadcasters claimed that they were not liable to pay entertainment tax (or
luxury tax
) under the respective state enactments. They submitted that since they were engaged in broadcasting of signals through television channels to subscribers, hence, were possibly liable to pay only service tax to the Central government.
It set aside the Kerala High Court's 2012 judgment that had held that exemption given to cable operators from luxury tax while making DTH operators to pay the same is a case of discriminatory levy of luxury tax merely because of technological differences in the system of delivery of entertainment in both the services.
The top court said that the 2012 judgment, which declared the levy and collection of luxury tax on cable television operators with connections of 7,500 or more as unconstitutional for being discriminatory was "incorrect".
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India Today
15 minutes ago
- India Today
10% Maratha reservation to continue this year, hearing on fresh pleas from July 18
The Maratha reservation issue will once again come under judicial scrutiny, with a newly constituted full bench of the Bombay High Court set to begin hearings on fresh pleas from July 18. However, the 10 per cent reservation in education and government jobs given to the Maratha community will continue this bench, comprising Justices Ravindra Ghuge, NJ Jamadar and Sandeep Marne, announced on Wednesday that they would devote half-days, full working days and even some Saturdays - ordinarily court holidays - to complete the hearing hearing pertains to challenges against the Maharashtra State Reservation for Socially and Educationally Backward Classes (SEBC) Act, 2024, which grants 10 per cent reservation in education and government jobs to the Maratha community. Under this order, any admission or job appointment made under the SEBC Act remains subject to final court directions. The matter was previously heard by a bench led by then-Chief Justice DK Upadhyaya. However, proceedings halted after his transfer to the Delhi High Court in January. Following this, some students approached the Supreme Court, citing harm to their admission prospects due to the ongoing legal uncertainty. The top court subsequently directed the Bombay High Court to constitute a new full bench, which has now taken Wednesday's hearing, senior advocate Pradeep Sancheti, representing the petitioners, urged the bench to expedite proceedings as the academic admission cycle was underway. He argued that, unlike job appointments, delayed admissions would be harder to rectify, even with the interim order in General Dr Birendra Saraf, appearing for the Maharashtra government, said the state needed more time to respond to the latest petition filed in court. He maintained that the interim order provided adequate safeguards and questioned the urgency shown by the petitioners. He also suggested that the petitioners withdraw the new plea if they were unwilling to allow time for the state to considering the submissions, the bench scheduled the hearing for five weeks SEBC Act, passed on February 20 last year by the Eknath Shinde-led Maharashtra government, followed recommendations by the Maharashtra State Backward Class Commission (MSBCC) led by retired Justice Sunil Shukre. The commission had concluded that "exceptional circumstances and extraordinary situations" warranted reservation for the Maratha community beyond the 50 per cent cap mandated by the Supreme legislation, which came just ahead of the Lok Sabha and assembly elections, sparked a series of public interest litigations and petitions challenging its constitutional validity. Simultaneously, numerous intervention applications have been filed by Maratha organisations defending the reservation and opposing the addition to the reservation issue, petitions have also been filed questioning the legality of Justice Shukre's appointment as chairperson of the Watch
India Today
15 minutes ago
- India Today
Denmark approves US military bases amid tensions over Greenland
Denmark's Parliament has passed a contentious bill allowing the establishment of US military bases on Danish soil, sparking criticism over national sovereignty and renewed tensions involving legislation, which expands a 2023 military access agreement with the Biden administration, passed with 94 votes in favor and 11 against. It permits a broader US military presence beyond existing airbase access, and now awaits formal approval from King Frederik argue the move undermines Danish sovereignty and paves the way for deeper American influence, particularly in light of President Donald Trump's previous attempts to purchase Greenland, a strategically important and mineral-rich Arctic territory under Denmark's realm. In response to lawmakers' concerns, Danish Foreign Minister Lars Lkke Rasmussen emphasized that Denmark retains the right to terminate the agreement should theUS make moves to annex Prime Minister has previously condemned US interest in the island, asserting that Greenland is not for sale and warning against viewing it as a development comes amid broader geopolitical tensions in the Arctic and highlights the delicate balance Denmark faces as a NATO ally seeking to maintain control over its semi-autonomous territories.(With inputs from Associated Press)Must Watch
India Gazette
an hour ago
- India Gazette
SC seeks HC's response on lady judge's plea over 'demoralising' remarks in performance report after CCL request
New Delhi [India], June 11 (ANI): The Supreme Court on Wednesday issued notices to the Jharkhand High Court and the State government, seeking their responses to a plea filed by a lady judge who sought removal of certain remarks made in her annual performance report. The petitioner, a single parent and a District and Additional Sessions Judge in Dumka, Jharkhand alleged that following her request for 194 days of Child Care Leave (CCL), certain 'painful and demoralising' remarks were made in her Annual Confidential Report (ACR) for the assessment year 2023-2024 issued by the Vigilance Registrar of the High Court. After hearing the matter today, a bench of Justices Prashant Kumar Mishra and Manmohan directed the respondent HC and the State, to file their responses to the lady judge's plea within four weeks time and listed the matter for further hearing in the first week of August. The judge had initially approached the Supreme Court after the High Court rejected her CCL request seeking 194 days of leave. The apex court then directed the High Court to reconsider the matter, following which she was granted 94 days of leave, by the High Court. During the hearing on Wednesday, the Supreme Court was informed of a fresh grievance with regard to certain negative remarks made in her ACR. In her application, the judge submitted that while the remarks were stated to be 'suggestive' and non-adverse, they were demoralising and have caused her mental agony. As per the lady judge's plea she has had an impeccable career record of having disposed of huge number of cases. Thus, she sought that the said remarks in her ACR report be expunged. After hearing submissions, the top-court directed the High Court and the State government to file their responses within four weeks and posted the matter to be heard next in the first week of August. Advocate Anup Kumar is representing the petitioner judge. (ANI)
