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
Indian Express
22 minutes ago
- Indian Express
In foreign countries, people still fondly remember Gandhi, Nehru & Indira: Supriya Sule
EVEN as NCP (SP) chief Sharad Pawar on Tuesday reiterated there was no need to call a special session of Parliament to discuss Operation Sindoor, his daughter and Baramati MP Supriya Sule said during her recent visit to foreign countries to brief their governments about India's military operation, she found that people in those countries still fondly remember Mahatma Gandhi, Pandit Jawaharlal Nehru and Indira Gandhi. 'When I led the delegation of our country to four foreign countries, the first thing people there told me was that you come from the country of Mahatma Gandhi… They said Pandit Nehru had visited their country and they still remember his speeches. Calling Indira Gandhi an iron lady, they asked me to tell us more about her,' Sule said in her speech at the NCP's 26th foundation day celebration at Balgandharva Rangmandir in Pune. Sule said people in those countries also spoke about Prime Minister Narendra Modi. 'They were all praise for Prime Minister Modi,' she said. 'The entire delegation had the same experience in countries like Ethoipia, Egypt, South Africa and Qatar,' she said, adding India has to move forward with Mahatma Gandhi's ideology. Sule said she was fortunate to have led the country's delegation to four foreign countries. In his speech, Pawar reiterated there was no need to call a special Parliament session on Operation Sindoor as demanded by the opposition parties, saying there was need for secrecy in defence matters. 'When it comes to national interest, we should keep all our differences aside and remain with the nation,' Pawar said. 'Whichever government is in power in the country, the NCP will back it on national issues,' Sule said. Sule slammed the Hagawane family for the death of their daughter-in-law over dowry demand. 'I cannot believe the Hagawane family can stoop so low. An educated family forces their daughter-in-law to end her life for dowry. What is wrong with Maharashtra? Is this the Maharashtra that we dream of? The situation is very disturbing… Isn't it our responsibility as NCP to make Maharashtra dowry-free. Are we hankering only for power? Let us start a campaign against all social evils. Let us go around in Maharashtra. If the king is moving around in a plane, how will he know the plight of the people,' she said. She said the NCP came to power within six months of its formation. 'After that it remained in power for 18 years. The party has grown because of its dedicated and devoted workers and leaders. Everyone has contributed. Also, we cannot forget the contribution of those who are no more like R R Patil and others,' she said. Sule said Sharad Pawar's speech in rain in Satara completely changed the poll scenario in 2019. 'I cannot forget the incident of July 2… It changed the poll scenario completely,' she said. 'We have people who have never left Pawar saheb. These are men of steel,' she said.
Time of India
33 minutes ago
- Time of India
Cong will resist BJP's ‘divisive agenda': TPCC chief
Hyderabad: Telangana Congress president B Mahesh Kumar Goud on Tuesday accused the Narendra Modi govt of attempting to replace important provisions of the Constitution with Manusmriti. He said the Congress has launched the 'Jai Bapu, Jai Bhim and Jai Samvidhan' movement to protect the Constitution and save the country from divisive forces. Addressing a public meeting after participating in the 'Jai Bapu, Jai Bhim, and Jai Samvidhan' rally in Shadnagar assembly constituency, organised by Congress local MLA Veerlapalli Shankar, Mahesh Goud alleged that Union home minister Amit Shah had insulted B R Ambedkar inside Parliament. He said the BJP will go to any extent to remain in power, accusing it of inciting caste and religious divisions to serve political interests, risking the country's unity. He said the Congress chief Mallikarjun Kharge, Sonia Gandhi, and Rahul Gandhi, along with the entire Congress, are confronting divisive forces through various programmes. "Even after 11 years in power, the BJP govt is unable to showcase any significant development. The people have already taught the BJP a lesson for its overconfidence in securing 400 seats, yet the party refuses to change. PM Modi made tall claims of going to war with Pakistan, but backed down under pressure from US president Donald Trump. While Modi retreated, Indira Gandhi ensured that 92,000 Pakistani soldiers surrendered during the 1971 war. The Congress demands answers. What did the country actually achieve or lose in Modi's so-called war with Pakistan?" he asked.
New Indian Express
34 minutes ago
- New Indian Express
Constitution is quiet revolution empowering marginalised: CJI Gavai
He said the Constitution told the citizens that "they belong, that they can speak for themselves, and that they have an equal place in every sphere of society and power". "At the Oxford Union today, I stand before you to say: For India's most vulnerable citizens, the Constitution is not merely a legal charter or a political framework. It is a feeling, a lifeline, a quiet revolution etched in ink. In my own journey, from a municipal school to the Office of the Chief Justice of India, it has been a guiding force," he said. He said India's Constitution was not merely a legal framework but a social and moral document crafted amidst deep inequality. Its drafters, he noted, included representatives from some of the most marginalised communities in India -- Dalits, Adivasis, women, religious minorities, persons with disabilities, and even those formerly labelled "criminal tribes". "The Constitution is a social document, one that does not avert its gaze from the brutal truths of caste, poverty, exclusion, and injustice. It does not pretend that all are equal in a land scarred by deep inequality. Instead, it dares to intervene, to rewrite the script, to recalibrate power, and to restore dignity," he said.
